Alpharetta Homes for Sale Numbers and Market Update

The sky has fallen on the real estate market. Banks are even afraid to foreclose on homes until the new administration tells them how they are going to bail them out. Prices are down nationally and almost on all local levels as well. But, not everything is all bad. It never is. I don't participate in spin, but, what I just said above isn't bad spin. It's just not the entire story.

Here's the problem when we hear a news caption like this; it never tells the whole story. Let's look at a market I know well - Alpharetta. In Alpharetta as in most places, there are less sales than in the past. Fundamentally, this is because the sub prime market for home loans is gone and fewer people qualify. I have an economics question that just begs to be answered, but, the media would rather tell tales of gloom and doom rather than seek to understand and inform:

What happens to a market (any market) where all things stay the same except the volume of sales for that product? The answer is right in front of us, but, we just don't want to realize that the problem is, in the end, very simple and solutions to the problem need to address this in a simple way lest I fear we cause more problems than we had. A drop in sales simply throws all other economic statistics out of balance. If your inventory of products stays the same and the volume drops, prices must drop to meet the lower demand. Other factors push and pull on a market to a greater or lesser degree, but, this is the core issue on a macro level. The snowball for the housing market is higher foreclosures, lower prices, less confidence and all of the rest that we hear about. As a buyer or seller, you cannot make an informed decision about buying or selling a house with this information. Sure, it can scare you, but, that means you need to find out more information. Even more of a reason to get your information from a knowledgeable real estate professional rather than a news media that isn't qualified to provide you with the answers and information you need.

In Alpharetta homes sales are down about 38% from the same time last year. Inventory hasn't dropped to meet the lower supply, but, other factors push and pull on the market beyond supply and demand. Above I said that there are other forces that push or pull on a macro level, but, a city is not macro when compared to the overall market. Therefore, the other factors that push and pull have a greater impact. For example, Alpharetta has better schools, low crime, lower unemployment, higher average education levels and various other factors that help make it a market that will drive new buyers TO it compared with other areas that may not have some of the features that buyers want. So what happens is that you see some areas weather the storm better than other areas.

This is the case for Alpharetta. In an absolute since, Alpharetta homes for sale have a lower value than they did one year ago, but, not by much. In January of 2008, 82 homes sold in an average of about 92 days for an average sales price of $498,594. But, in January of 2008, we had one sale for $6,300,000 in Windward which counts because it did sell, but, is not typical. It also skews the numbers out of whack. If you take out that one sale, the average sales price drops to $426,972. In 2009, we had 50 sales - there may be a few additional sales, but, probably not too many that have yet to be entered in the system. The average sales price in January of 2009 is $377,406. That's an 11% drop in value from the re-figured 2008 numbers sans the 6 million dollar sale. These type of numbers are fairly close to and in line with the Greater Metro Atlanta numbers, although Atlanta is slightly worse. But when we look at a three month time interval, that changes considerably and the three month moving average is a better indicator of the market simply because of the greater number of sales data to use which tends to balance the numbers more accurately. Besides, one month does not a trend make. For the three months beginning in November of 2007 through January of 2008, the average sales price was $435,433 with 327 sales. The most recent three month average sales price is $407,739 with 214 sales. Keep in mind that the 6.3 million dollar sale is in the older set of statistics. If you remove that, the numbers are much closer to equal. In other terms though, the average sales price is down a little over 6% (much closer to flat if we took out the big sale) BUT the sales volume is down 34.5%  due mostly to what I spoke about earlier - the sub prime market no longer being available for buyers.

So, what's the rub? Well, the sales volume drop is uniform for Alpharetta to Metro Atlanta, but, the price drop is not. Whereas the overall sales price drop is well into the teens in percentages, Alpharetta is closer to a 3% or 4% drop. The reason for this goes directly to varying desirabilities of different areas and should be a considerable part of your decision making process in where you decide to buy if you fear further price declines, but, need to move or if you are a seller, this is critical information as it goes directly to pricing of your home and what it will take to sell it.

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