Alpharetta Real Estate Homes for Sale

We’re going video, baby!

I’ve enjoyed writing this blog for the last sixteen months.  I’ve learned a lot and I appreciate the nice notes from so many of you saying that you appreciate the value this blog has given you when making decisions related to real estate in Alpharetta.

Just the other day, I had a note from a reader in Texas who put it succintly:  She said that real estate statistics were easy to find.  Analysis, opinion and insight were things she had not been able to find.

Those commodities are what this blog aims to deliver and in that spirit, we are taking it to the next level in 2008.  MORE value in 2008 is our charge.

I will continue to write this blog because I believe in the value of the written word.  However, we are adding narrated online video tours.  The key word being ‘Narrated.’  My opinion, based on the reception we have received from this blog is that readers want MORE opinion, not less, even if they disagree.  At least we’ve then had the opportunity to explore the issues.

I’ve spent the past three days learning as much as I could about posting video to the web and a blog, and hunting for examples of how other real estate professionals are doing this.  I haven’t found anyone who is actually narrating home tours as they shoot them.  All I’ve found is glorified virtual tours posted to YouTube.  These are nothing but a bunch of still photographs with transitions set to music.  I want to give the viewed actual play by play, as if we were actually together walking through the house.

Without further ado, here is the first of our video tours (as opposed to virtual tours ;->).  I pray it will be the first of many to come.  Please, by all means, let me know what you think of this video and how we can modify it to make it better.

Oak Ridge Run Roswell, GA Off Woodstock Rd. Near Roswell Park 4 Bedroom / 2.5 Bath Finished Basement List Price: $430,000

http://www.alpharettarealestatehomes.com/0038EF

Click on Map to Enlarge

I’ve said on this blog before that you can lie with statistics - or at least mislead by not telling the whole story.  I find this often with the current housing crisis.

The headline of the most recent Office of Federal Housing Enterprise Oversight (OFHEO) report, referenced on the front page of the USA Today today, reads:  "House Price Weaken Further in Most Recent Quarter, First Quarterly Price Decline in U.S. since 1994."  That sounds scary, doesn’t it?

While this is technically correct, if you looked at the report in more detail, you would probably not be so scared.

I’m not saying the housing market is a bowl of cherries, but it is certainly not all gloom and doom as most media outlets would have you believe.  Frankly, I’m growing a bit weary of hearing about how bad the market is.  I hear it from other agents, usually the ones who aren’t selling anything, and I hear it from frustrated sellers who can’t sell their homes because they are overpriced, and I hear it every day on the news.

Personally, I prefer to look at it this way:  Atlanta is a growing metro area with steady job creation; Alpharetta and North Fulton have some of the best public and private schools around; people want to live in the South because of the weather, jobs and because it is cheaper to live here than other regions; people want to live in Alpharetta and the surrounding cities and they appreciate the informed, professional real estate services that we provide them.  My business is up over last year.  Can the market be that bad?

Housing Crisis Centered in Four States, Not Georgia

If you dig into the actual report, which no one ever does because it is 89 pages long, you’ll see that the housing crisis, in terms of negative appreciation, is isolated to California, Florida, Michigan and Nevada, with Massachusetts and Rhode Island, playing a small role.  There are still twenty states that have experienced 5% or better appreciation from Q3 2006 through Q3 2007.

Yes, that is a drop from the double digit appreciation of 2004 and 2005, but do home owners expect the market to continue like that for ever?  To me, it has sounded like some homeowners thought they were in some way entitled to double digit home appreciation and now when they are trying to sell they say, "Well, I’m not gong to give the house away."  If I had a nickel every time I’ve heard that in the last six months ;->

If you zero in on the Southeast, home appreciation has been respectable in the last year given the overall economic climate:  Tennessee 6%, North Carolina 6.5%, South Carolina and Mississippi 5.1%, Alabama 5.3%.  Georgia is the low man on the totem pole at 3.5%.

Atlanta’s Housing Appreciation is Average for the Country

If you look at just Atlanta, it ranks 139th out of 287 metropolitan statistical areas.  Atlanta has had 2.61% growth over the past year but a -.56% drop in the last quarter.  Over the past 5 years, Atlanta real estate has appreciated 20.18%.

Looking at other cities in the U.S., seventeen of the twenty cities leading the the DEpreciation were in Florida and California.  The other three were in Michigan.  Surprise there!  My reading of the OFHEO report is that while certainly appreciation has come down across the board, that this problem is mostly concentrated in a very few states.

Alpharetta Real Estate Continues to Appreciate

Even within Atlanta, there are pockets of variance in the real estate market.  While the city as a whole may be relatively flat price wise, I wrote on this blog back in September that average sales prices have continued to increase in North Fulton (Alpharetta, Milton, Roswell and Johns Creek) on both sides of GA-400 by $30,000 over last year.  People want to live in North Fulton, that is obvious - and we are here to help them accomplish that goal!

It is a great time to buy real estate in Alpharetta.  Sellers who have remained on the market are truly motivated to sell.  But buyers, don’t think that Alpharetta is a fire sale.  Yes, it is a good time to buy.  Yes, you can find a lot of house for the money.  But good houses still sell quickly, so my advice to buyers is not to get too high on the hog.

I don’t know about you, but my glass is half full and I don’t subscribe to gloom and doom in Alpharetta.  Looking at the details of the housing data tells the more complete story.

http://www.alpharettarealestatehomes.com/0038EB

Warning:  Statistics lie.  Well, actually, people can lie with statistics.  If you don’t believe me, check out this book. With that disclaimer, I’ll tell you that the real estate market in North Fulton county is flat…and I’m not lying, really. He is my definition of flat:  In July 2006, 162 single family homes were sold in North Fulton (Roswell, Alpharetta and Milton), west of GA-400.  In July 2007, 163 single family homes were sold in the same area. Good, we’ve now debunked with one statistic the common misconception that the real estate sky is falling.  I can see the headlines now in the Atlanta Journal Constitution:  “Atlanta bucks nation trend.  Real estate market holds firm.” Heck, it was just last week when the national media couldn’t get enough of the announcement that for the first time the national average sales price actually declined.  Yes, that made a good story; always lead with the blood.  There is only one problem:  I don’t really care about the national average.  I mean, I do, but only because it is some sort of global indicator of the health of the economy.  But in the end of the day, I care about the national sales average about as much as I care about the temperature of the oceans.  I do care about the global environment but, damn it’s hot here and I want to know when it is going to rain next.  Real estate is local, too, and the fact that the national average is down doesn’t help me in my market. The Laws of Real Estate Market Analysis Law number one is that real estate is local.  Law number two is that, not only is it local, it also varies significantly by price point.  Law number three is that new construction and resale homes are different markets. So, while I can say with perfect certainly and a statistical fact to back me up that the real estate market in North Fulton is flat, if we care to look a little deeper we will see some interesting developments in the last year in this market. 1.  If you include the other half of North Fulton (east of GA-400), sales were actually down from last year.  Four hundred and four homes were sold in July 2006.  A year later only 344 were tallied. 2.  Average days on market is up from about 54 to about 63.  Plus, the number of homes active in the market increased from 1,859 a year ago, to 2,440 this year.  Sellers, you have a lot more competition than you did. 3.  The good news is that the average sales price is up over last year, so beware bargain basement shoppers.  The west side average price increased from $481k to $488k.  On the east side, they had a whopping increase from $391k to $436k. The Breakdown But remember, statistics lie.  What happens when we break down the market by price range and look at absorption rates, the rate that new homes on the market are absorbed by the buyers.  Another way to look at it is the months of inventory on the market.  Six months of inventory is considered neutral between a buyer and seller market. The two tables below show reveal some interesting points about our current market, points that are anecdotally reinforced by my personal experience in the marketplace every day. (Totals don’t add because of omitted data at lower prices.) Overall inventory is up from 5.2 months in July 2006 to 7 months in July 2007. 

2006	$200k to $250k	$250k to $300k	$300k to $500k	$500k to $750k	$750k to $1M	$1M to $2M	$2M	Total
Sold in July	666	556	1348	536	127	58	9	3858
Current Inventory	155	183	522	308	148	126	47	1669
Months of Inventory	2.8	3.9	4.6	6.9	14.0	26.1	62.7	5.2
Days on Market	47	45	45	46	56	75	112	154

I don’t know that this is exactly earth shattering, but there are two different markets in North Fulton:  the market below $750k and the one above $750.  Actually, I think the demarcation line is a little lower, but there are definitely two distinct markets.  This seems pretty logical.  Not everyone has $750k to spend on a house but a lot of people still want to live here and have $400–$500k to spend.  That part of the market is still hot…OK, warm, particularly west of GA-400.

2007	$200k to $250k	$250k to $300k	$300k to $500k	$500k to $750k	$750k to $1M	$1M to $2M	$2M	Total
Sold in July	602	509	1228	573	125	65	9	3442
Current Inventory	172	207	715	440	181	142	56	2014
Months of Inventory	3.4	4.9	7.0	9.2	17.4	26.2	74.7	7.0
Days on Market	48	52	55	54	66	90	103	131

  There is one caveat, though.  This year, there is more inventory, no doubt, so your home has to be in better condition and compare favorably to increased competition in order to sell.  However, even though it is more competitive, good homes in these price ranges still sell relatively quickly (under 60 days) for around 97% of the list price.  Operative word was “good”.  The junk sits on the market. New Homes When it comes to new homes, the picture is a little more bleak.  First of all, there is practically no new home inventory below $500k (only 43 homes in all of North Fulton.)  When selling your $800k resale home in a market with 17 months of resale inventory, don’t forget that there are 120 new homes in inventory, too.  This is where the market has really slowed down:  In 2006 there was a 22 month inventory of new homes between $750k and $1 million.  In 2007, there is a 45 month supply west of GA-400 and a 33 month supply east of GA-400.  Buyers, this is where you can really drive a bargain.  Builders are offering huge incentives and resellers are having to lower their prices if they truly want to sell. Bottom Line I’m a bottom line guy, so here goes.  Markets go up; markets go down.  That is reality.  No one was bemoaning the poor buyers a few years ago when everything was selling.  Now all I hear is woe is me from the media and from the sellers.  If you want to sell you home, North Fulton is still a desirable place to live, people are still coming here and home prices are still increasing believe it or not.  But if you want to sell, you need to be realistic about your price and the condition of your home.  Best thing about this market is that if you are a buyer it is a great time to buy.  When was the last time you heard a national media outlet say, “Great time to buy residential real estate in America.”  Well, come to North Fulton. 

http://www.alpharettarealestatehomes.com/0038D1

The short answer is because there is a new sherrif in town.

First, let me say that I feel like I have dodged a bullet this year.  My property taxes – more accurately, my assessed value – did not change from 2006.  However, I can hear the Fulton County Tax Assessor reloading and I can feel the litte red dot from his range finder on my house when I sleep at night.

There are about 11,500 homes in Milton and 82% of them were reassessed this year, the highest percentage in all of Fulton County.  In Alpharetta, Roswell and Johns Creek, about 60% of properties were reassessed and in Sandy Springs only 25% were reassessed.  Sandy Springs residents…look out next year.

New Sherrif

Historically, Fulton County has reassessed about a third of all homes each year.  This pattern has kept the county on a three year rolling cycle for keeping the values current.  The historical problem, though, was that the values have been all over the board even if they were adjusted every three years.  This lead to wholesale changes in the Fulton County Tax Assessors office last year and the hiring of a new chief appraiser, Burt Manning.

Manning’s focus is on cleaning up the problem and the only way he sees to do that is to reassess everything in the county with consistent criteria.  This year his office reassessed 55% of all property in Fulton County.

Residents in Milton have seen their assessed values increase as much as 20% over last year and the average across North Fulton is about a 13% increase.  I’ve had clients call me with questions and concern about the increase and they have indicated a desire to appeal.  Remember that the only grounds you can appeal on is taxability, uniformity and value.

The increase is really caused by two factors that combined to make the situation worse.  First, values in many parts of the county were way to low – or the assessor’s office was just too slow in increasing them.  It was five years after I moved into my house that the assessor showed my “fair market value” to be anywhere close to my purchase price.

Second is that there has been so much growth in North Fulton in the past 5–7 years.  Manning has stated accurately that sale prices continue to go up in North Fulton and increases in property assessments are “part of living in a desirable community.”  

Since I have lived in North Fulton since 1999, my assessed value has increased 60%.  Remember, my value did NOT go up in 2007;  I’ve got that to look forward to.  I estimate that the market value of my home has increased just about the same amount, so I don’t feel so bad in paying the taxes that I’m charged.

However, next year I’m probably going to be hit with about a 15% increase and my property is surely not going to increase 15% in one year, particularly in a somewhat flat real estate market.  My taxes will most definitely reflect a truer market value next year; the reason that my taxes will have gone up disproportionately to my home value is because they started out artifically low.

So What Does All This Mean?

If our taxes are going up, where does all the new tax revenue go?  First of all, Fulton County’s 2007 budget shows about a 2% increase in property tax revenues from 2006.  In 2006, though, the County brought in about $15M MORE than it had budgeted.  I suspect 2007 will bring in more, too.  Even if it doesn’t, your share will definitely be higher - and someone else’s proportionaltely lower. 

Do I hear distant cries from the North Fulton woods for a new, separate county?  Would it be ironic that in an effort to correct the problems in the assessor’s office, Manning comes in and does the right thing, but in the process creates more animosity between the residents of North Fulton and the county government.  Many residents of North Fulton will feel, rightly or wrongly, that they were targeted.

Additionally, most taxing juristictions reduce the tax rate (the millage rate) each year to compensate for the increased tax base.  This allows the jurisdictions to stay “revenue neutral” and for your taxes to remain the same even though your assessed value increased.  For instance, Fulton County is reducing its millage rate from 11.407 to 10.281 mills (dollars per $1000 of assessed value).

City	2007 Millage Rate
Alpharetta	6.6
Roswell	6.087
Johns Creek	4.614
Milton	4.731
Duluth	5.191
Suwanee	5.77

The City of Milton, on the other hand, is not reducing its millage rate.  By statute both Milton and Johns Creek can set and keep the millage rate at 4.731 mills for the first three years.  Johns Creek is actually at 4.614 mills, but the point is that Johns Creek is not lowering theirs either.  Both these cities are going to get a bit of a probably much needed windfall as a result of Fulton’s reassessments.  These two new cities can use the extra revenue to build reserves, offset startup costs and start to build needed infrastructure.

Finally, when purchasing a new home, most prospective buyers ask at some point what the taxes are.  (Buyers from New Jersey are always amazed at how low Georgia taxes are.  I could double them and they’d still think they were low!).  Make sure that when you look at the previous year’s tax bill for a property that you are interested in that it either has or has not been reassessed by Fulton County.  The only way to do that is to look at the history of assessed value for the house, not just the previous year.

http://www.alpharettarealestatehomes.com/0038CD