Atlanta Real Estate News Archives

Metro Atlanta Real Estate News Trends

Metro Atlanta real estate news trends seem to indicate an increasing number of Americans in search of the proverbial American Dream of home ownership may not be able to experience it. In a nutshell, they either can’t afford the prices of new homes or are unable to save money for a down payment.

Recent statistical models show prospective home buyers at various household income levels are likely to experience sticker shock when shopping for a home this spring. Finding a home in their affordable price range is expected to be a challenging task for many.

Recent Metro Atlanta real estate news trends indicate an ever-growing number of Americans may not be able to buy a home.

Home prices throughout much of the nation have risen by as much as 40% during the past five years. Conversely, incomes have increased roughly half that pace, therefore, creating a chasm between price and affordability. First-time buyers and those in the lower-tiered household income range will face significant competition for the listings they may be able to afford. In addition, higher interest rates may also dampen their ability to afford many homes on the market. If interest rates continue to rise, potential home buyers and borrowers on the qualification borderline may be unable to qualify for mortgage financing.

An even more disheartening twist in the Metro Atlanta real estate news trends is the feeling among some housing experts that lack of available credit is a bigger problem than what interest rates do or don’t do. In the words of one housing economist, there appears to be two completely separate housing markets today: One for higher-income purchasers that seems to be brisk and successful, and one for affordable housing units that’s stagnant and struggling.

Lack of growth in the category of starter homes is cited as one reason first-time home buyers, such as millennials, have been slower then previous generations to buy their first home. Incomes just haven’t kept pace with home price increases, making it difficult for middle-class income borrowers from attaining home ownership.

As has been mentioned numerous times in Metro Atlanta real estate news trends, the inventory of available – and affordable – homes is in short supply. Due to this tight supply, those homes that are on the market are likely priced higher than they ordinarily would be, creating a seller’s market – what typically occurs when the supply doesn't equal demand. In this case, even the lesser priced homes may be out of reach for many prospective purchasers.

The Down Payment Dilemma
To make matters worse for some, saving money for a sufficient down payment is also a challenge that’s a direct result of two factors: 1) Not earning enough money to be able to save and, 2) As home prices continue to rise, so do rents for the first-time homeowners waiting for the right time to buy.

A 20% down payment on the median-priced home of $192,500 in the U.S. currently is roughly $38,500 based on a recent Zillow report. Compounding the problem, in parts of the country where incomes are higher and prospective homeowners are able to save money, the real estate prices in those areas are more expensive, too – making it the typical "catch 22" scenario when it comes to affording a home.

Despite mortgage loan programs requiring considerably less than the widely-accepted 20% down payment – some as little as 3.5% – first-time borrowers are finding those loans are available at higher interest rates and they require the addition of private mortgage insurance (PMI.) PMI insurance is a type of mortgage protection insurance insuring the lending institution against the borrower defaulting on the mortgage payments. The premiums on PMI can be rather steep – especially on top of an already-high loan amount and resulting monthly mortgage payment.

To combat against the higher cost of financing more and putting less of a down payment, many first-time home buyers are tapping into other assets to make the American Dream a reality. Metro Atlanta real estate news trends are seeing some prospective first-timers withdrawing money from their 401(k) accounts, while others are relying on loans or gifts from parents to provide the necessary 20% to avoid PMI – and the monthly escrow of taxes and insurance payments required for loans with higher loan-to-value (LTV) ratios such as these. Typically, lending institutions who finance more than 80% of the appraised value of a home will require the borrowers to pay the monthly pro-rated portion of the real estate property taxes and the homeowners insurance premium into an escrow account. When the taxes and insurance premiums are due and payable, the lending institution then pays those amounts out of the borrower’s escrow funds and the process starts all over again for the next year.

While the short-term solution may be to increase the number of affordable homes on the market, unfortunately that process takes a while. New home construction, while brisk in some markets, still lags behind demand. In addition, home builders are commanding top dollar for new homes, forcing purchasers to sell their existing ones for as much equity as possible.

It’s a cycle worth continuing to follow as part of the Metro Atlanta real estate news trends – not only here in Metro Atlanta , but throughout the nation in coming months.

See more articles pertaining to the most current Metro Atlanta real estate news trends in the section of articles on Atlanta Real Estate News just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.

Metro Atlanta Real Estate News Outlook: Housing to Cost More?

Making the Metro Atlanta real estate news outlook is the recent policy from the Trump administration that it had reversed one of the eleventh hour decisions made by the outgoing Secretary of Housing and Urban Development (HUD). The reversal involved the reinstatement of a cut in the Federal Housing Administration (FHA) annual insurance premium. The new administration stated the need to take a closer look at the premium reduction, saying the cut will increase the risk that U.S. taxpayers take on should there be a housing crisis like the one we saw nearly a decade ago. Detractors against the administration’s move say the FHA’s insurance fund is substantial and is positioned to provided mortgage borrowers a benefit by way of the premium reduction.

FHA borrowers usually are those who are the least flush with cash. As a result, the FHA program is tailor-made for homebuyers who are unable to afford more than a modest down payment – requiring the FHA’s mortgage insurance. With a qualifying FHA loan, a borrower can put down as little as 3.5%. Conventional lenders also offer low down payment lending programs requiring private mortgage insurance (PMI) and generally higher FICO credit scores than their FHA counterparts.

The Metro Atlanta real estate news outlook for 2017 is that it will cost you more this year than in the past.

The reversal of the premium reduction is expected to impact borrowers who already may be on the borderline of being able to qualify. The higher monthly payments created by not having the insurance premium cut will equate to approximately a .375% rate increase for prospective borrowers seeking FHA loans. That, coupled with the recent rise in interest rates after the presidential election will mean that the cost of buying a house – for many people – will increase slightly during the early spring of 2017.

In the Metro Atlanta real estate news outlook, while interest rates spiked as a result of the stock market’s rise post-election, they seem to have settled somewhat during the holidays – only to slightly rise again in recent weeks. While economists are split on whether rates will continue to rise throughout 2017 and by how much, most seem to agree that mortgage interest rates will not exceed 4.25% during the year. If that happens, although it will signal rates of slightly more than 1.25% higher than the all-time record lows experienced in much of the previous 12-18 months, the rate will still represent a relatively low interest rate for which to pay to purchase a home.

Of more concern than interest rates is the cost of the price of a newly-constructed home. In December, the Metro Atlanta real estate news outlook showed that the average price of a new home increased by over 7% compared to the same month last year. The prices reflect – for the most part – increased costs builders face in two key areas: the cost of land and the availability of labor. The cost of labor and the availability of labor are items which are less likely to improve during the new administration, as much of the homebuilder workforce is comprised of immigrants. In a recent survey by the National Association of Home Builders (NAHB) 78% of builders cited labor as their most pressing problem – and 82% felt it would be worse in 2017.

In addition, the other factors affecting the housing market as mentioned in the Metro Atlanta real estate news outlook recently has been the real estate market’s continued lack of sufficient inventory. The number of homes on the market for sale will likely mean the supply won't meet the demand again this year, making for another seller’s market in many of the more popular real estate markets throughout the U.S.

Lastly, as home values continue to appreciate – possibly not as rapidly as they did during 2016 – that means the number of homes on the market for sale will be priced at a premium. Real estate experts say the average appreciation rate of homes in the nation is expected to be in the 5% range, with some markets being higher and some lower. That’s slightly lower than what occurred in the 2015-2016 real estate markets, when housing values are at rates nearing 6% in some hotbeds, while averaging nearly 5.5% nationwide.

While the jury may still be out on factors such as interest rates, it does appear that the prevalent Metro Atlanta real estate news outlook for 2017 is that if you’re in the market to purchase a home, it’ll cost you more this year than in the past. However, the market appears to be poised and ready for what will probably be a good year for the real estate industry. The spring selling season will soon be here, giving buyers and sellers a much better idea of what to expect for the remainder of the year.

See more articles pertaining to the most current Metro Atlanta real estate news outlook in the section of articles on Atlanta Real Estate News just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.

Metro Atlanta Real Estate Outlook

The Metro Atlanta real estate outlook these days is a combination of good and bad. The good is that home prices have been rising nationwide for 53 consecutive months – nearly 4 1/2 years! The increases have floated millions of borrowers previously underwater on their mortgages to the safe surface where they can finally catch their breath. In addition, during the first three quarters of 2016, U.S. homeowners were the recipients of more than $837 billion in total home equity.

Now, the bad. Despite such significant increases in home equity, the gains have not been able to fight the negative connotation of rising mortgage interest rates in the minds of consumers. While more young Americans in their home buying years are employed and more millennials have moved into a position to be able to buy for the first time, consumer sentiment for home buying is dropping. Let’s take a look at what’s caused this reaction and what sort of murky picture it may paint for housing in 2017 and beyond.

The Metro Atlanta real estate outlook includes the housing outlook for 2017.

Most real estate experts say the home sentiment concerns in the Metro Atlanta real estate outlook are twofold: A shrinking number of consumers see the recent rise in mortgage rates to lessen, and even fewer say their overall household income is higher today than it was this time a year ago. This information was revealed in a recent survey conducted by Fannie Mae. A Fannie Mae economist explains: “Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home-purchase sentiment, at least in the near term. A spike in economic optimism in the immediate aftermath of an election is typical. Whether consumers will sustain this level of optimism into 2017 remains unclear.”

Ironically, the rise in interest rates recently affecting the Metro Atlanta real estate outlook is generally a reflection of optimism among consumers. Stock market investors pushed investments to record levels in response to the expectation that the new Republican administration will favor growth, business and employment. And, while such expectations would translate into greater income growth, better job security and new businesses – normally important catalysts for the housing market – thus far, indications are that housing sentiment is murky, at best.

The outlook may be fueled, in part, by what experts see as a wide economic chasm in the housing market. Although home values have gained and are continuing to do so, most of the increases have benefitted only those homes in the middle to upper end of the market. This has resulted in negative equity situations concentrating in the lower end of the market – at what is typically described as the bottom 20%.

According to Black Knight Financial Services, borrowers living in homes in the lower-tier of pricing are nine times more likely to be underwater than homeowners in the top 20% of the housing market. Being underwater is loosely defined as those homeowners who owe more on their mortgage than their home is worth. In addition, while several years ago negative equity was a diverse and widespread problem throughout the nation, today it’s evolved into more of a localized market problem. Economists say that at the end of 2010, there were approximately 30% of American homeowners underwater on their mortgages.

Many consumers, though buoyed by the gains in home equity over the past 12-18 months, find themselves unable to access it – another cause for concern in the Metro Atlanta real estate outlook. This comes as a result of higher interest rates, but also could be a direct result of their inability to qualify for a mortgage loan – regardless of the interest rate. Remember, a number of these consumers not only were underwater because of the housing crash, but struggled mightily to be able to make the house and other payments on time, creating slow credit history and positioning themselves in the minds of lenders as less than qualified. Whatever the reason, the share of equity currently held by borrowers that was available for access dropped from 73% in October 2016 to 33% in December 2016.

While interest rates have edged slightly downward in recent weeks, economists say they may very well move back upward as the new administration takes over, and as the new President's economic plans are made more known.

That raises the question that always plagues the housing industry and is often a part of the Metro Atlanta real estate outlook: What will the outlook for the spring “housing season” be? While the honest answer remains to be seen, the component parts are these:

1) Rising home prices will continue to be a win effect, although there has been some leveling off in some markets throughout the country.

2) Interest rates, though still somewhat volatile, are comparatively speaking lower than they have been in recent modern times – with the exception of the last 12-18 months when rates were at or near record-lows. Rates are still affordable, despite not being as low as they were this time last year.

3) Home inventory will continue to be a concern, as few homes have hit the market for sale – sellers who would ordinarily have decided to sell are holding off until they have a better selection from which to choose – after all, they need to move up and more out, too.

4) Consumer sentiment, though of concern now, can change fairly quickly. There are plenty of homebuyers in the marketplace that can and will be able to afford mortgages – despite the slightly higher rates – and though they may find themselves paying top dollar in what will likely be a seller’s market, there are deals to be found among sellers who may have priced themselves out of the market and are now needing to sell.

See more articles pertaining to the Metro Atlanta real estate outlook in the section of articles on Atlanta Real Estate News just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Metro Atlanta Housing Market: Looking Back and Ahead

The Metro Atlanta housing market deserves an analysis of what's happened so far this year – and what we can expect in 2017. With the end of the year quickly approaching, let’s take a look at some of the important facts impacting the real estate market this year.

Refinancing is on the decline.

It took the better part of the entire year, but it appears most people that can refinance already have done so. With rates at or near historic lows, borrowers flocked to their mortgage lenders to pay off loans with interest rates as high as 5%-7% in favor of those averaging in the 3.00%-3.5% range. Refinancing, according to mortgage experts, were the the largest growth stimulators for most banks and lending institutions. Since rates just can’t get much lower, it’s doubtful that refinancing will continue to be as popular as it was in 2016.

Buyers are attracted to new homes.

Many in the Metro Atlanta housing market are choosing to purchase newly built single family homes instead of existing ones. With home inventory levels down in the Dayton Ohio housing market,

Despite the homeowner participation rate at a record low during much of 2016, many homebuyers chose to purchase newly built single family homes instead of existing ones. With home inventory levels down in the Metro Atlanta housing market, homeowners were slower to perform the necessary upgrades to their homes and put them up for sale. This created what economists describe as a “self-fulfilling prophecy” of continued lower inventory and a supply unable to keep pace with demand. The effect was especially detrimental to the starter home market, where first-time homebuyers usually begin their search.

Homebuyer confidence continues to remain robust.

As we’ve seen in recent years, millennials are very careful with their money. As such, many of them have put off home buying until they are able to save for a down payment, or until they are confident with their career choices and the city in which they live and work. However, these fiscally conservative young adults increasingly do want to own their own homes. The proverbial “catch” is they want to do so on their own terms. Remember, this segment of the population is accustomed to renting and they have grown used to the short-term flexibility and expectations that go hand-in-hand with renting an apartment or home. Surveys show more than 85% of millennials plan to stay in the homes they purchase for less than seven years. So, mortgage terms and the ability to sell their homes in a few short years are important factors to them.

Low interest rates prevailed.

Probably the biggest advantage the Metro Atlanta housing market experienced in 2016 was the consistently low interest rates. Steadily improving consumer confidence combined with reportedly lower jobless rates have given the Federal Reserve little reason to raise interest rates, at least for the time being. Experts say the downside of lower interest rates is that new home sales – which have come to expect and almost take for granted low mortgage rates – will suffer slightly. As is normally the case with a rate increase, even a slight one, potential home purchasers typically are slower to make a move. On a more positive note, however, rising rates usually mean home sales prices will either level off or decrease somewhat.

Remember, all real estate is local… and that’s a good thing.

During 2016, it was reinforced over and over again that it’s difficult – and even dangerous – to lump the real estate market into one large basket. Each individual market is different because each region of the United States is different in terms of the economic influencers in a certain community or state. While some markets may be experiencing very good sales and higher sales prices, others may be lagging behind – negatively influenced by the closing of a large manufacturing facility or the damages cause by a flood, a hurricane or other natural disaster. In addition, the housing market in a state or region that employs a large number of millennials, for example, can be impacted negatively because the average length of time they stay on a job is 2.8 years.

With what we’ve experienced and learned in the Metro Atlanta housing market in 2016, what can we expect in 2017?

While many factors could come into play between now and the first of the year, it appears to many economists that home prices have probably peaked and will likely go down slightly – for these main reasons:

What goes up must come down. That's usually a “given” in the real estate market. In the long run, home values usually rise. However, if we look at the manner in which prices have risen during the past year or so, a number of the hotter markets will likely experience a correction, causing prices to stabilize or dip.

Interest rates will go up. After all, interest rates can’t stay this low forever, right? So, expect an increase – even a slight one – sometime in 2017. And when rates rise, home prices will decrease.

Home inventory will increase. Analysts expect new construction to shift from multifamily units to single-family homes, making the Metro Atlanta housing market less competitive in the process.

Affordability will be a hot topic. It always is, but affordability will become even more important if inventory increases and interest rates go up.

How will the elections affect the Metro Atlanta housing market? The answer is yet to be determined and few discernible changes – if any – will likely not occur until late in the first quarter of 2017, if then. While both candidates have referenced the housing collapse of less than a decade ago, neither has provided a clear policy outlook for how to avoid a similar occurrence in the future. Look for continued government regulation and housing safeguards to protect the industry. However, as always, there will have to be a balance in order to keep home ownership affordable and popular without repeating the mortgage sins of 2008.

See more articles pertaining to the latest Metro Atlanta real estate news in the section of articles on Atlanta Real Estate News just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.

Metro Atlanta Millennial Homebuyers on the Move

After several years on the sidelines, a new report shows Metro Atlanta millennial homebuyers are finally starting to enter the market. The recently published survey included more than 13,000 homeowners, renters, buyers and sellers and is part of the Zillow Group Consumer Housing Trends Report. The survey shows millennials are participating in the market and, indeed, making a larger impact than originally thought. Half of all buyers in today’s real estate market are age 36 or younger. In addition, half of all sellers are under age 41.

The Zillow Group survey also reveals the young adult Metro Atlanta millennial homebuyers are instrumental in adding greater diversity to the real estate market and others throughout the U.S. Roughly 66% of millennial homeowners are white, compared to 77% of all homeowners. Millennial homeowners are comprised of Latinos or Hispanics with 17%, African-American homeowners total 10% and Asian or Pacific Islanders comprise 7%.

Metro Atlanta millennial homebuyers are starting to enter the real estate market

Surprisingly, the new report showed an unusually high number of millennial homeowners live in the nation’s suburbs. Previously, statistics showed millennials gravitated to the metropolitan areas and the conveniences renting close to their jobs provided. The study revealed that 47% of millennials now live in the suburbs.

The transition of millennials into suburbia is more than just a “coming of age.” The rise in popularity is largely driven by the cost of living. The urban or metropolitan living, though hip, trendy and popular was also expensive. The irrefutable laws of supply and demand showed, once again, that as a product becomes popular it also becomes more valuable. As a result, metropolitan home prices have skyrocketed in recent years. A good number of millennials, therefore, have explored greater opportunities in the suburbs. The trade-offs of making the decision to live farther away from their downtown jobs include larger homes and shared amenities in new neighborhoods that feature such attractions as community pools, fitness centers, recreation areas and playgrounds.

Suburbs Attracting Most Metro Atlanta Millennial Homebuyers

The millennial migration to the suburbs seems like a logical progression for many. Their reluctance to buy their first homes was based largely on the rising costs of housing. The new research unveiled by Zillow shows the current market’s “started homes” are nearly as large as the homes other first-time buyers may move up into – and they cost as much as 18% less. Before we pronounce urban living as a thing of the past, it’s interesting to note that it is still thriving. Statistics show roughly 33% of millennial-aged homeowners live in what can be described as the "urban metropolitan city cores." In fact, millennials living in the metropolitan areas comprise a larger percentage of homeowners of any previous generation of Americans.

While there appears to be more Metro Atlanta millennial homebuyers in the market than previously thought, it’s not for everybody. Experts say 66% of millennials in the home buying market are also considering renting as an option. Roughly one in three millennials seriously consider renting. The reason? As usual, money. To millennials, buying a home is a huge hassle. Statistics show home buyers spend more than four months shopping for a home to purchase. In addition, after all that time and effort, 32% of buyers end up paying more than they had initially planned or budgeted for. As Metro Atlanta real estate prices soared in recent months – while home inventory remained at near-record lows – it wasn't unusual for successful buyers to make more than one offer before they found a home. To avoid the large number of rejected offers and to make every effort to adhere to their predetermined budget, many millennials have opted to remain on the sidelines and continue to rent. Again, the reason is purely financial. Of the renters across the U.S., nearly 60% earn less than $50,000 annually. Conversely, home buyers average $87,500 in yearly income. As one real estate expert puts it, “Depending on where they (millennials) live, home ownership may be out of reach.”

Why All Metro Atlanta Millennial Homebuyers Aren't Ready Yet

With a larger number of millennials venturing into the home ownership arena, the question remains, “Why not all?” As mentioned above, Metro Atlanta millennial homebuyers are cost-conscious. While often thought of as impulsive and reckless with their spending – as most young people for generations have been characterized – most millennials value their money. During the housing crisis of less than a decade ago, many members of the millennial generation watched helplessly as their families and friends struggled with homes, mortgages, jobs and other byproducts of a nationwide recession. They’ve seen firsthand the effects that job layoffs and foreclosures have had on their families or someone they know. As a result, many millennials have emerged with the mindset that they won’t make the same mistakes that others made. Home buying for them, at least at their young age, is something they should enter into with careful thought and financial planning.

Another segment of millennials have, no doubt, been ill-informed that they won't be able to qualify for a home mortgage unless they have a large enough (20%) down payment. While that goal may still be one of choice, perhaps a larger number of millennials would consider buying if they were made more aware and understood better the low down payment lending programs in today’s market.

Some millennials say they are reluctant to by a home until they are confident their career choices and employment decisions are stable. The thought of buying a home only to put it on the market a year or two later if they get transferred or change jobs seems like more trouble than it may be worth – especially for those who haven't bought and sold real estate before.

Lastly, those of us in the real estate market must also understand that home ownership is not the ultimate goal for some millennials. Those that prefer to take things more slowly – including getting married and starting families – count those financial commitments among decisions they just don’t have to make right now.

See more articles pertaining to real estate in the section of articles on Atlanta Real Estate just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Latest Metro Atlanta Real Estate News: Fair Housing Gets Fairer

The latest Metro Atlanta real estate news recently included the U.S. Department of Housing and Urban Development (HUD) issuance of new regulatory guidelines to the Fair Housing Act. The new guidelines more closely quantify and qualify “those actions or policies by landlords, property managers, real estate agents or lenders that could be classified as discrimination” against people protected under the Fair Housing Act. Under the new regulations, HUD is able to charge those in violation of the act and have the U.S. Department of Justice (DOJ) represent the complaining party. Violations carry with them the possibility of damages paid to the complainant in addition to potential civil penalties and applicable punitive damages as determined by the court.

The latest Metro Atlanta real estate news concerning HUD and Fair Housing

This past April, HUD added a codicil to the Fair Housing Act regarding the assessment of criminal records in certain real estate transactions. HUD contends that refusing housing to people based on their criminal background or arrest record is discriminatory. Their reasoning? Because a disproportionate number of people with criminal pasts are comprised of racial minorities. In addition, this past September, HUD further opined that language-related housing restrictions or caveats violated the Fair Housing Act. Their reasoning? They contend the language barrier between the national origin of those seeking housing closely corresponds to their limited proficiency in speaking English.

So, what’s behind the new regulatory guidelines and why are they in the latest Metro Atlanta real estate news? Experts say clarification is an important addition to the Fair Housing Act because such measures help to better define discrimination in housing, and to close potential loopholes to provide equal housing opportunities to all U.S. residents. Furthermore, with home ownership at its lowest rate in over 50 years, more and more people are renting. HUD wants to make sure property managers are well-versed in the guidelines and their ramifications. With more people renting now than owning, HUD is aware that the ongoing relationship between the housing provider – the landlord – and the property manager extends longer than that of a real estate agent or mortgage lender. In comparison, while an agent’s or lender’s involvement with a person protected under Fair Housing ends upon completion of the transaction, the landlord and property manager interaction continues throughout the term of a lease. In addition, according to experts, many housing providers and landlords are not "up to speed" on the Fair Housing Act regulations and are not complying as a result. Enter HUD to start better policing the industry.

HUD’s ruling regarding limited proficiency of the English language was designed to clear up existing grey areas or implied loopholes. The new regulatory additions say the refusal on the part of property managers or landlords to rent to people who can’t speak fluent English is discriminatory, based on their national origin. In addition, the law encompasses all areas of housing – including lenders. What this means is that lenders must be able to translate forms and allow for interpreters to be present during the loan application process and the loan closing. HUD has identified this shortcoming as a hindrance that, until now, has prevented prospective borrowers who don't speak English from getting mortgage financing.

Experts say as trends in housing tend to grow and change, more regulatory guidelines will ultimately be added to eliminate the loopholes and grey areas which still exist – especially regarding the responsibilities and limitations on housing providers. Most property managers expect HUD as well as state legislatures to provide additional guidelines to further clarify what's expected from the rental housing industry. Better regulation within the industry, on both the federal and state level, would allow for educational opportunities for housing providers and landlords, therefore minimizing the number of occurrences of violations of the Fair Housing Act.

Property management insiders say their hope is the states recognize there is an information breakdown, and awareness is needed to educate people working in what is a specialized niche within the real estate market. They cite training for landlords, housing providers and property managers as the most important factor to help them understand the regulations and their obligations under the Fair Housing Act guidelines.

One property manager summed up a critical issue affecting the rental industry and the impact some decisions make with respect to the regulations. Their expectation is that additional regulations will eliminate the subjectivity of opinions in the process of leasing rental units to minorities and others. The property manager went on to say that he usually suggests property managers distance or remove the landlord from the decision-making process when it comes to the rental properties. After all, he contends, that’s what property managers are for. They are the experts. “You take out any sort of human judgment… because even if it’s well-intended, there could be something that would have ramifications… counter to the HUD guidelines,” he said.

HUD normally tailors their new guidelines and clarifications based on previous Fair Housing Act violations of which they are made aware.

The prognosis seems to be clear. Fair Housing Act regulations will likely continue to be part of the latest Metro Atlanta real estate news. The government, it appears, will add more layers to the Fair Housing Act in an effort to ensure those protected under the Act will not be subject to discrimination. While it’s a noble, admirable end – nobody should be a party to discrimination – the means to that end remain bureaucratic, arbitrary and borderline overkill.

As long as the home ownership rates continue to be as high as they are, more people will be forced to rent – including a large number of people protected under the Fair Housing Act. Those people include substantial numbers of minorities as well as non-English speaking tenants who’ve migrated into the United States.

The latest Metro Atlanta real estate news is that we can expect Fair Housing Act regulations to get broader to encompass more aspects of rental real estate and housing.

Is There a Metro Atlanta Housing Bubble Looming?

Among several housing-related stories making the news around here locally asks the question, Is there a Metro Atlanta housing bubble in our future? Before we can attempt to answer the question, let’s define what is meant by a “housing bubble.”

What exactly is a "Housing Bubble?"

The Metro Atlanta housing bubble debate continues.

A “housing bubble” is an increase in housing prices fueled by demand, speculation and fervor in the market. Bubbles normally begin with an increase in housing demand, usually accompanied by a very limited supply. When speculative housing investors enter the market it further spikes demand, which increases prices even more.

While the definition certainly sounds like what’s been trending in the housing market lately, let’s look at several reasons there isn’t a Metro Atlanta housing bubble on the horizon.

Average home prices are currently higher than they were in 2007 in more than 20 major metropolitan markets. In addition, larger cities with limited home inventory of both new and existing homes are seeing prices rise as high demand continues. Home sales throughout the nation recently reached the second highest level in more than 10 years, according to the National Association of Realtors. Despite these occurrences, some housing analysts say any “bubbles” that may exist are relegated to certain local markets, and the bubbles haven’t created the financial risk inherent with the housing boom of roughly 10 years ago. The earmark of the housing bubble that occurred during that time period was the easy availability of credit – highlighted by borrowers that should not have qualified for mortgages they received.

Still, the housing market is nowhere near where it was during the housing boom – and the resulting bust – that made just about every city's real estate news almost daily.

While mortgage interest rates are near record lows and the affordability of housing is still high, absent are the speculative buyers driven by easy credit availability. During the boom, many of these speculators were investors seeking to make a quick profit. In addition, the lenders who fueled that speculation along with making credit available to non creditworthy borrowers have long since learned their lesson, it appears. So, too, have the mortgage lending regulators, who have implemented a range of policies and procedures to better safeguard lending institutions from violating lending practices that may repeat history.

The Metro Atlanta housing bubble debate continues.

Experts say definitive housing bubbles are a rare occurrence. Despite some of the warning signals that exist in today’s market, the truth of the matter in today’s Metro Atlanta real estate market is, there are just as many other factors that are non-existent.

A great number of well-respected economists have studied and tracked housing bubbles. Most of them agree that when a market bubble occurs, home prices increase slowly to being with and gain traction and momentum in time. During this rise in prices, the home buying public is usually skeptical and unfazed initially. Economists say they’ve seen the same sorts of bubbles in other markets – stocks, commodities, futures, even art and wine. Over time, the initial skepticism morphs into a semi-acceptance by the buying public, as they witness prices being pushed even higher, or as the name implies, the bubble gets bigger.

As the low cost and high availability of mortgage credit gives the bubble a greater opportunity to continue to grow, it invites new participants. Many of these new purchasers, or speculators, are less credit-worthy and less savvy than typical real estate investors. However, they all have one thing in common – they all envision selling their newly-acquired real estate properties at a profit – fueled by the higher prices they feel they can command. This increased speculation can grow at such a rapid pace that the news may imply “the sky’s the limit” when it comes to housing prices in such a market. The result? Investment growth expands so much that it increases the housing supply, which in turn exceeds the existing housing demand. When supply outweighs demand, prices fall – or in this case, the bubble bursts.

Economists argue that what’s missing in the Metro Atlanta housing bubble equation is widespread participation on the part of the buying public. Gone are the days of flipping condos in popular locations. Gone, too, are the mortgage loans made on homes that exceed their value. The biggest change is that borrowers with poor credit aren’t able to borrow money as easily as they were during the housing boom and resulting crash. A case in point is the simple fact that it’s difficult, at best, for a homeowner who is still underwater on his mortgage to refinance.

Looking ahead.

Some real estate analysts say they expect certain changes in the near future to occur that may burst any regional, localized Metro Atlanta housing bubble that may exist. They cite potential interest rate increases by the Federal Reserve as among such events. However, they are quick to point out that the banking system today – unlike the real estate news of a decade ago – isn’t overwhelmed with sub-prime mortgages. In addition, most banks aren’t leveraged to the success of the real estate market anywhere near the degree that many were years ago.

Simply put, the existing housing market issues aren’t severe enough to spark another recession – at least not one of national proportions. Most economists agree that there may be a series of “mini-recessions” that are locally or regionally based and will only affect the players in high-end residential or commercial real estate. That bubble – if it can be called a bubble – will likely burst.

In the meantime, there will be expected fluctuations in housing market supply and demand. New home construction will continue to try to keep pace with the demand for new products and new home innovation at prices average American families can afford. And while interest rates may not stay as low as they have been, there’s little reason to believe that mortgage availability will suffer for the time being. Comparatively speaking, while there are some similarities in the true definition of what a Metro Atlanta housing bubble is, the simple truth is that the U.S. is no where close to the dire straits the housing market found itself in just a short decade or so ago.

See more articles pertaining to real estate news in the section of articles on Atlanta Real Estate News just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Metro Atlanta Real Estate News May Affect Luxury Home Prices

The latest Metro Atlanta real estate news indicates recent employment gains could improve the price recovery of luxury homes on the market. During the first quarter of 2016, unexpected stock market volatility caused a decrease in luxury home values. Prices were able to recover slightly during the second quarter with an increase of nearly 1%, according to a nationally recognized real estate data firm. Luxury homes are typically defined as being in the top 5% of the highest-priced homes sold in each American city. Let’s look at the impact the recent job market improvement may have on luxury home prices.

Help For Luxury Homes? Metro Atlanta Real Estate News

The U.S. stock market took quite a tumble in June with the Brexit vote and the resulting repercussions throughout world markets. However, it’s rebounded considerably since that time and recent employment numbers are likely to boost the stock market even more. Economists expect the employment growth to aid the recovery in luxury home prices.

Metro Atlanta real estate news indicates that luxury homes may see a boost in prices

With this recent Metro Atlanta real estate news, analysts say the higher, luxury end of the housing spectrum is more sensitive to changes in the stock market. The reason is that homebuyers with higher net worths and incomes are likely to have more money invested in various equities than middle America. Some economists say the housing market, in general, can adjust and adapt to even large spikes or dips in the stock market. However, they say, there are some markets – especially those in high-value real estate areas – where volatility in the stock market has a very direct correlation to the luxury housing market. In those markets, what happens in the stock market is more closely tied to real estate transactions because homebuyers in that income segment rely heavily on market activity to produce down payments and other liquid investments. Plus, there’s often a resulting sensitivity from foreign buyers who would otherwise invest in high-end real estate. Global volatility and its effects on the U.S. stock market curb – at least temporarily – their interest in purchasing luxury homes in some major cities.

The improvement in the jobs report, some analysts believe, will make it more likely the Federal Reserve will raise interest rates during the year. While not directly tied to mortgage interest rates, a hike in the fed funds rate may signal an end to record-low mortgage rates. Despite the seemingly negative impact such an increase may have on most homebuyers, a mortgage rate increase will probably not affect buyers in the luxury home market. In the words of one real estate professional, “Luxury (home) buyers aren’t motivated by mortgage rates. As evidence, luxury home prices were sluggish in the second quarter even though rates were near rock bottom levels.” Real estate agents and economists alike say what matters the most to buyers in the luxury market is a solid investment opportunity that is likely to pay higher returns in the future – much like their investment philosophy in the stock market. So, if the employment results do spur growth in the economy, there could likely be an improvement in the luxury housing market, regardless of what happens to interest rates.

Regarding the Federal Reserve, some economists maintain there will be no increase in interest rates for the remainder of 2016. In addition, some feel that bond yields – to which mortgage interest rates are more closely tied – may move downward as a result of several other global market factors. One respected economist said, “Rate hike odds by year-end shifted from 32% to 40% after (the recent) jobs number.” That would mean the likelihood of the Fed increasing short-term rates would still lean in favor of that not happening.

Of course, the luxury housing market – like its counterpart at other points in the buying spectrum – still suffers from a lower than normal inventory. However, if higher prices return, investors and homeowners are more likely to put their homes on the market – especially if the stock market continues its return to normal levels – allowing them the opportunity to use those additional earnings to purchase newer or larger homes.

The unknown factor that could affect luxury prices is the upcoming presidential election. With that event occurring in the fall – coinciding with the normal housing market shift that post-spring and summer bring – there could be a leveling off of luxury home prices. Interestingly, however, politics overseas may increase luxury prices in some U.S. markets traditionally popular to foreign investors. Real estate analysts point to Miami Beach, Florida, for example, where luxury home prices rose roughly 22% during the spring quarter.

Economists and political pundits alike continue to debate what effect the U.S. presidential election results will have on the housing market in general. If history is any indication, little impact is expected for several months after the presidential election. Either candidate, including those that may be reelected or replaced in upcoming Congressional races, will individually or collectively need time to assess and change economic policies. While we will all likely keep an eye on Metro Atlanta real estate news on a regular basis, most analysts say the greatest likelihood for the real estate markets to be affected will lie in the hands of the American public and the perception that a win by either party will make a difference in their financial future. In short, human nature takes over and prospective home purchasers who are optimistic about the country’s economy will likely be bullish on home ownership – if the price is right – while those with a more pessimistic opinion will likely be more cautious until economic conditions improve.

The bottom line is the real Metro Atlanta real estate news is that it remains to be seen how the recent job gains and the November election will affect the housing market.

Metro Atlanta Real Estate News: What to Expect Moving Forward

Metro Atlanta real estate news includes one recurring question: “Where are all the houses?” It’s a question real estate professionals, economists and prospective homebuyers have been asking for some time now. While home buying demand is high and home prices have been on the rise, the real estate market has still not completely recovered. In addition, home ownership today is a better financial move than paying rent – especially because mortgage interest rates are near all-time lows. Despite these favorable market conditions one thing is missing – home inventory. Let’s take a look at some of the reasons inventory is scarce and why it’s so important and how it affects Metro Atlanta real estate news.

Metro Atlanta Real Estate News – What the Future Holds

Let's look at Metro Atlanta real estate news and what the future holds for the industry.

An economist from real estate data firm, Trulia, said, “At a time when rising prices should be inducing inventory, exactly the opposite is happening.” He went on to say that the lack of inventory has been the biggest story so far in 2016 and will continue through the end of the year.

According to another real estate data firm, Zillow, inventory in the month of May for low-tier and single family residences fell nearly 9% compared to May 2015. Middle-tier home inventory dropped 9.7% compared to the same period last year. Top-tier home inventory decreased .5%. With over half the year behind us, what does the future hold? Here are a few predictions most all analysts agree on.

Interest rates may reach record lows.

Some U.S. economists predict mortgage interest rates to dip to record lows. This is due in part to the recent Brexit controversy, which pushed the Treasury rates to new lows. Treasury bonds have long been the benchmark for mortgage interest rates. Experts say the low rates may increase home demand, and mortgage lenders are already reporting a spike in refinancing. Naturally, if rates stay low or go lower, refinancing will likely continue.

New home construction is still lagging.

New home starts during May nearly reached 1.14 million, falling short of the 1.5 million expected and required to help supply to match demand. To make matters worse, the majority of the single family homes built recently have been on the higher end of the price spectrum. Lower-priced, starter homes for young families and first-time borrowers continue to be lacking.

Another often-asked question making Metro Atlanta real estate news these days is “Will Millennials ever begin buying homes?” Experts ask an even more telling question – “Will builders ever start building homes Millennials can afford?” The answer is a resounding “possibly.” In recent months, growth in new home sales prices has cooled slightly to about 4% on the top-tier home market. However, on the lower end it’s risen to 8%. Median home prices have gone up roughly 5.4%. Most economists argue that raising starter home prices would spur additional new construction in that market segment.

Homeowners aren’t selling their homes.

In today’s market, for a variety of reasons people aren’t selling their homes and moving as often as they once did. That means there are fewer homes being put on the market – contributing to the inventory problems. While home prices have risen, signaling a great time for homeowners to sell, they’re finding prices on their next home are higher, too. They simply can’t afford to move out and move up.

Demand remains strong.

Historically, home values appreciate at an average annual rate of 3%-3.5%. Currently, home values are appreciating at a higher rate – 5% or more in some markets. Experts cite low home inventory, low mortgage interest rates and a strengthening job market. In addition, as mentioned earlier, buying a home is a more attractive financial decision than renting. According to Zillow, the current breakeven point for home ownership – the length of time a homeowner would need to live in a home before buying would be monetarily advantageous over renting – is 1.8 years. In addition, Trulia estimates in order for that situation to change, mortgage interest rates would have to reach 7% or better. In this economy, that's doubtful.

Be prepared to pay more – and faster.

Metro Atlanta real estate news sources say it’s not unusual for homes to sell well within the typical average of 45 days – sometimes considerably less. According to industry insiders, that’s the shortest length of time homes have been on the market since 2009. On average, it’s a week faster than a year ago. Analysts expect that will continue at least for the near future.

In addition to the short period of time homes are on the market, they’re also commanding prices that are very near the asking prices. National surveys say homebuyers are paying 95.3% of the asking price – again, the highest in a decade or more. Sources say that in some markets the sale-to-list percentage is more than 100%. The reason? In a hot market with high demand and low inventory, people need to move fast to get the house they want. The more quickly they move, the more likely they are to overpay. Speed leaves little time or desire to negotiate price.

There are other factors on the radar.

As a result of the housing conditions and their collective affect on the market, it’s unlikely the Federal Reserve will raise short term interest rates again this year. The probability that mortgage rates will remain low is pretty good. Of course, anything could happened in a volatile world economy, but most economists say any marked ripple affect would be minimal, at best.

Lastly, since this is a presidential election year, there’s always an unknown factor that hovers above real estate activity. Metro Atlanta real estate news sources say some brokers are experiencing hesitation from clients to list or buy due to the election’s uncertainty. Expert opinions vary as to if and how the real estate market would be affected – regardless of which candidate wins.

Student Loan Debt Hurting Metro Atlanta Home Buying

The Metro Atlanta home buying experience continues to be an elusive one for many first-time purchasers for a variety of reasons. Student loan debt is among the biggest hurdles facing prospective buyers that ordinarily would be prime candidates to purchase homes. In addition, not only is student loan debt responsible for delaying first time home buyers from entering the market, in some cases it has long-term effects.

A recent study was conducted by the National Association of Realtors in conjunction with SALT, a consumer literacy program provided by the nonprofit American Student Assistance organization. The study’s findings show that 71% of non-homeowners with student loan debt say that debt is the biggest obstacle preventing them from buying a home. Even more concerning was the revelation that more than half of the respondents said their student loan debt would likely keep them from buying for the next five years or more. Let’s examine how the Metro Atlanta home buying arena is being impacted by student loan debt.

Metro Atlanta Home Buying: The Student Loan Debt Roadblock

Student loan debt is keeping many people from entering the Metro Atlanta home buying market.

Not only has mounting student debt affected the housing market in terms of purchasing, it remains a serious roadblock for college graduates unable to comfortably afford rising rents in many parts of the U.S. Student loan debt is identified as the main reason 4 out of 10 college graduates still live with family members. These and other findings were the result of the recent survey of 3,000 people who are making on-time payments on their student loans.

The survey showed the lion’s share of those postponing Metro Atlanta home buying was comprised of older Millennials, aged 26-35. They were also the segment carrying the most debt – ranging from $70,000 to $100,000.

Surprisingly, over half of those surveyed in each segment reported that student debt – regardless of the amount – was affecting their ability to buy a home and postponed their decision to do so. Roughly half of younger Millennials live with family members, some paying rent and some not.

While college graduates as a whole are more likely to maintain steady employment and have the income to qualify for home ownership, their student loan debt payments are standing in the way. As one student put it, “Student loan debt is far outweighing the benefits of my degree.”

Even more frustrating to many is the realization that interest rates on student loan debt is markedly higher than current mortgage interest rates.

A majority of the non-homeowners in the survey who earn more than $50,000 annually reported that their student loan debt adversely affects their ability to save money for a down payment. Those earning $50,000 or more are above the median income level necessary to purchase a single-family home in the U.S.

Student Loan Debt Adding Stress

The added stress of several hundred dollars per month on a student loan when added to the normal demands on a household budget equates to thousands of dollars over time that could be used for a down payment.

A total of 80% of the Millennials in the survey said their student debt clearly hampered their ability – and willingness – to save for a down payment to purchase their first home. While low down payment loan programs are available in the Metro Atlanta home buying marketplace, those options come with certain restrictions. The low down payment loans have tight limitations on the borrowers debt-to-income ratio, and student loan debt figures heavily in the equation.

Ironically, prospective buyers aren’t alone in their student debt woes. Student loan debt is also responsible for changing the perspective and decisions of potential home sellers. Almost one third of current homeowners surveyed reported they were putting their plans of selling on hold because of their student loan debt. Roughly 20% of respondents said it was just too costly to sell their homes and move to a bigger or better home because of the monthly debt payments.

In addition, 7% of those surveyed reported bad credit marks as a result of student debt issues and 6% said they were still underwater on their home mortgages. They cited student debt as the reason they are unable to pay more towards their mortgage balance.

With inventory low in the Metro Atlanta market and home ownership at a dramatic low, the problems that student debt adds to first time home buyers is significant.

Younger homeowners are unable or unwilling to sell and move up and many older homeowners are still housing their adult, college graduate children, preventing them from downsizing. Combine that with an usually low number of homes fro sale in the market and it’s a recipe that has pushed prices upward. Real estate professionals say the market is beginning to show a little resistance to higher prices, but the problems still exist.

See more articles pertaining to home buying tips in the section of articles on Metro Atlanta Home Buying Tips just below Atlanta Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.