Over the year of 2014 the steady rise of home prices shows that consumer confidence is up. As I write this GasBuddy.com shows the lowest gas prices (2.59 a gallon) we have seen in years being in Lawrenceville at the Shell Station on Sugarloaf Parkway and Old Norcross Rd. Thanksgiving just ended and Gray Thursday, Black Friday, American Express Small Business Saturday and Cyber Monday are all looking like big shopping holidays.
The other thing that is up is new construction. A few years ago when the market was stressed the inventory was so great and many investors came along and purchased them. The investors snatched them up so quickly that it caused a buying frenzy and drastic price increases. This caused difficulty for the first time home buyer to be able to get a home. The first time home buyer was competing with the cash investor and wasn’t able to do so very well. The first time home buyer had and still has many contingencies like loan qualifications, inspections and appraisals to be met before the home is actually closed and title transfers from the seller to the buyer. Most of your cash investors didn’t have these contingencies and could close within days of the binding agreement date. Who would you pick?? Of course you would pick the cash investor.
This left a lot of first time home buyers without inventory to buy a home. This lack of inventory was not only frustrating for the buyers but for us Realtors as well. However, today the cash investor doesn’t seem to be as in play as they were for 2013 and 2014. The pricing has gone up enough in some areas where the purchase for a cash and hold investor doesn’t make as much sense for profitability. There has to be a low enough purchase price to be able to buy, hold and rent the home out with a positive cash flow for the investors. This doesn’t mean that the cash investor isn’t there anymore; I can promise you they will pounce on a great deal when they see it. Other cash buyers are from the baby boomers downsizing and people relocating from other countries around the world. However, baby boomers are geniuses at their age now and won’t overpay for anything and global buyers come from cultures of negotiating everything and they won’t pay full price for anything either.
So, what does this mean now? In my humble and personal opinion (and what I am reading from other indicators in Gwinnett and across the nation) is that home prices are leveling off and we won’t see as much of a price increase as we did in the past few years for resale. Inventory is growing, homes are staying on the market longer and there are more and more price reductions for those homes sitting day after day after day. It’s time for the sellers to be more realistic about pricing their homes according to what the markets will bear. New Construction is on the rise and this will be a direct competition for those who are selling their homes as a resale home. What does this mean for buyers? With interest rates still being low it means they will be able to ask for more house and request more from the sellers. However, that is really only from resale and not new construction. There is still such a demand for new construction and though the inventory of new construction is up it is still behind the demand for it.
The pricing, however for new construction, is still going up. Many communities throughout Gwinnett County have dirt being moved in all directions. The City of Lawrenceville has some new construction signs off New Hope Road and Five Forks Trickum over near the Boys & Girls Club. We have also seen major new home construction out in Dacula and in the Historic Downtown Norcross areas. The metro Atlanta communities are special compared to those in other parts of the State and the country. We have the busiest airport in the world along with many American and Foreign corporations moving their headquarters to our communities.
This in turn brings people relocating to the area searching for jobs and of course housing. Today people and families want a turnkey home when they are purchasing a home. They don’t want other people’s problems. They don’t want a 14 year old hvac system, or equally old roof. They don’t want a house with problems today or in the next few years. They also don’t want a home with outdated bathrooms or kitchens. They don’t want homes that smell or where the neighbors have neglected to take care of their homes. They don’t want to live in communities where leaders don’t enforce quality of life; people are demanding more from a purchase of a home. They will wait for this lifestyle in new construction. You can see it today where inventory has been sitting in some neighborhoods for well over 60 -90 days and many price reductions to try and catch up with the markets.
So in closing for the year ahead, sellers price your home correctly or you will have an overpriced home or property and you will be waiting for the markets to catch up to your pricing. The markets are stabilizing and we want to sell your home and not let it sit day after day after day after day. Know your BIG WHY of selling and focus on that item instead of your idea of what your place is valued. The new construction is on the way and coming fast in 2015, so let’s get your home sold before that competition hits the Multiple Listing Services.