Ryan Ward's Blog: Atlanta, Georgia

Some are claiming "the bottom" here in Atlanta. John Adams, a very popular real estate investor with a talk radio show has been saying it for months, you can read other "experts" in the AJC who say that February was the bottom, but, I do not believe that to be the case and I believe that what we have is nothing more than a homes for sale in Atlanta problem - make that a too many homes for sale in Atlanta problem. In other words, there is still simply too much inventory for the current sales rates to stabilize the market now or for the near future.

The FMLS shows 43,799 homes for sale (active only) and the last month of complete sales data is April where there were 3,477 sold homes. Simple division gives you an absorption rate, or, months of inventory of…

Seen Through the Eyes of a First Timer

(I'm in the Keller Williams Realty Consultants office in Roswell, GA)

Saturday

I arrived in Orlando earlier today and finally got a chance to meet Cal Carter from the Gulf Shores outside of the exhibits and registration entrance at the Orlando County Convention Center. He's going to be sitting in on one of the panels so I'll definitely try to make that one. The city is jam packed with multiple conventions and traffic is a bear, but, I already feel energized and we have yet to really begin the event. I just finished scheduling the first two days of classes. I struggled a bit with whether to take this opportunity to invest some time in areas that I consider the weakest or to utilize the time to enhance my strengths.…

OK, so it isn't conventional to think of this as a good sign, but, it is imperative that this trend continue if we are to get out of this slowdown anytime soon. We simply have too much inventory and fewer housing starts contributes to lowering inventory. The federal government reported today that housing starts are down about another 6% bringing it to 50 year lows. Here is an excerpt from the report:

"Privately-owned housing starts in September were at a seasonally adjusted annual rate of 817,000. This is 6.3 percent (±12.0%)* below the revised August estimate of 872,000 and is 31.1 percent (±8.3%) below the revised September 2007 rate of 1,185,000. Single-family housing starts in September were at a rate of 544,000; this is 12.0 percent (±8.3%) below the…

For several months now, the FMLS has reported roughly 33% declines in the total number of home sales compared with the same time one year earlier. Condos have consistently performed even worse at something around 40% of a decline in sales volume, but, I'd like to take a look at this from a different perspective. We are so used to seeing the glass half full or half empty that we sometimes read market conditions through a colored lens that doesn't allow us to make honest and objective assessments of where we are and where we are going.

I'm aware that past is often prologue and we must look back to see where things may be going, but, not at the expense of what is happening at the present time. Atlanta real estate, like real estate in most other places right…

The FMLS puts together statistical reports monthly from their data and this chart is something I meant to post about a week ago. Sorry to be a little late on the most recent numbers, but, here they are. This chart reflects closed sales over the past 6 years. It may illustrate the market better than just about anything I've done recently.

I apologize that this isn't the fanciest chart you may have seen, but, I didn't make it. The point here is that for all of the pontificating about the market not being as bad as the media says, the truth is that it is quite bad - for sellers.

Atlanta real estate is definitely not hurting as bad as many areas, but there can be no question that we are hurting. In economic terms, this would border on depression. Remember…

It's no secret that across the country, much of the problem with real estate markets is the supply of homes available for sale. This is the simple economic principle of supply and demand. Below is a chart of the Atlanta market dating back to 1994.

Homes for sale in Atlanta have been on a steady increase as has Metro Atlanta's population so an increase in available housing is to be expected. However, this type of increase is not something that the real estate market is capable of absorbing for long periods of time. When underwriting standards constrict combined with difficulties caused by the sub prime mortgage, affordability goes down. This furthers the trend of rising inventories.

Until prices come down, we will continue to see inventories rise.…

As a consumer there is no question - the market is down. But, what does that mean, how does it affect you and what is the most important indicator? Well, there are lots of long winded answers with plenty of nuance and different people might give slightly different answers. To me, and I think to most, the most important part of the market is what the value of homes are and where they are trending. Most of the other things like supply and demand, the amount of foreclosures, pending sales, absorption rates and the like all filter in to the bigger equation of value. So here in Atlanta, the value of homes are down. Way down. Here is a chart going back a year showing the value of Atlanta real estate which has been on a steady decline.

I think this chart…

Unbelievable would be what I thought when I first saw it. Poor business decision, if that's what it is would be the reality. You see, MSN has some very unusual search results here in Atlanta. Typically, the most frequently searched term by consumers looking for real estate will be "city real estate" and in Atlanta, MSN returns the same website something on the order of 498 out of the first 500 search results! Here's a screen shot:

O.K. So I guess it's not exactly the same result - they are all subdomains of the same website. Now if you were a consumer searching for Atlanta homes for sale using the most used keyword phrase, do you think it might be a good idea to serve up the same website over and over again like this? Seriously.

Here is the search…