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The State of the Alpharetta Real Estate Market
By Ryan Ward | November 3, 2007
So the market has shifted in favor of buyers. That isn’t news. What might be interesting is that you might not know that real estate in Alpharetta has not seen the massive slowdowns you may have heard about in the news. Certainly, the Alpharetta real estate market has shifted, but, it is still better than most other areas in Atlanta. Here is a month by month breakdown of home sales in 20006 and 2007.
| Alpharetta | 2006 | 2007 | % Change |
| January | 121 | 132 | + 8% |
| February | 137 | 177 | + 29%% |
| March | 216 | 222 | + 2.7% |
| April | 209 | 202 | - 3.4% |
| May | 283 | 239 | - 15.5% |
| June | 297 | 282 | - 5% |
| July | 295 | 246 | - 16.6% |
| August | 284 | 201 | - 29% |
| September | 192 | 134 | - 30% |
| October | 176 | N/A | Data |
| November | 167 | N/A | Data |
| December | 191 | N/A | Data |
What Does This Mean?
In my opinion, a trend is defined as a minimum of 3 months worth of data doing the same thing consistantly. What is evident is that the trend from a sellers market to a buyers market began in April. You could argue that it was actually March, but, I would say that we need to see less sales in a month over the month in the previous year first, and, that was April. A quick check of the days on market for homes sold in April of 2006 indicates that on average it took 54 days for a home to go on the market and then go under contract. What that means is that the market actually peaked in February of 2007. From the rest of the data, it is safe to say that we definitely have a trend and that trend has been down.
Here is the Caveat
Since we know that you will be two months behind in your analysis based on looking only at closed sales, we need to do more determine where we are right now and whether we have reached the bottom or we will continue deeper into a buyers market. To do this we need to look at what is called the absorption rate
The absorption rate is defined as the number of homes sold in a given time period divided by the number of homes available for sale. The resulting number is the time period (defined by you) that it will take for all currently available homes to sell. We will use three months as we have already decided that it takes that long to make a trend.
- Currently there are 1,549 homes for sale
- During the last three months, we have an average of 193 homes sold per month
- This indicates an 8 month supply of homes
This is not bad and much better than Atlanta as a whole. However two factors come into play here:
- During the past three months, home sales have dropped every month.
- Supply is not coming down.
If both of these trends continue, we will see a stronger buyers market in the months to come. However, if either one or both of these number change we could see that the bottom of the market for sellers has been reached.
It’s too early to have sales data for October, but, it will be a critical month and the data will be very helpful in determining which direction we will be heading for the remainder of the year and the beginning in 2008. My suspicion is that we have reached about as low as we will go, but, I can’t say for certain.
What I do know is that whether the bottom is right now, next month or two months from now, it is a great time to buy. It’s not possible to know when the exact bottom of the market is until after we reach the bottom so what we can say is that the data indiicates that you have more choices, options and leverage as a buyer than you have in several years.
Topics: Alpharetta Real Estate |
November 3rd, 2007 at 1:45 pm
Very good analysis. From what I am seeing in Morris County New Jersey I would say that we have reached the bottom, but we are not turning up, but rather going sideways right now.
November 4th, 2007 at 11:19 am
Sounds like your area and much of Austin are about the same. It has more to do with bad press and a segment of the buyers not able to get loans than the underlying economics of the areas.
November 16th, 2007 at 11:21 am
I agree with Sam in that people are having a harder time getting into loans due to banks putting every loan under the microscope. I had a guy with a 780 score and no debts, but the bank wanted every little thing from him, like what his taxes were on his second home. He could have paid cash for the house, but the bank wasn’t happy.
Rick Marnon, Howell
http://www.oaklandlivingston.com