Alpharetta Real Estate Homes for Sale

Over the last few years I’ve received a number of phone calls from residents of Milton and Alpharetta neighborhoods asking my opinion, as a realtor, about how they can increase their home values.  Usually these calls are from older neighborhoods where the price of their homes was relatively lower than some of the newer neighborhoods.  However, the owners in the older ‘hoods think that their homes are not THAT much less desirable than the new homes.

The problem stems from the fact that raw land appreciated so quickly in north Fulton County, and particularly in Milton, where it is said to have quadrupled in a few short years prior to our current "market correction."

This created a price gap between the "original neighborhoods" and the new neighborhoods.  The original residents want to bridge that gap, but how?

Some of the neighborhoods like Brierfield near Crabapple have redone the entrance to the neighborhood with stacked stone signage and have replaced all the mailboxes and sign posts to given an updated look. 

That’s great, although, I don’t think that you can say the houses in Brierfield are worth $2000 more today than they were last year because of this.  Here’s my suggestion:  Promote the benefits of living in your neighborhood.

By that I mean:  market yourselves.  A neighborhood should have a unique selling proposition, just as a house should.  For instance, the neighborhood has one of the few swim teams around, or the best ALTA tennis program, or multiple lake lots with community access to the lake for fishing, or well-organized kids events like Halloween and Easter egg hunts, or horse trails, or proximity to a park or even a Starbucks or lawn maintenance included in the HOA dues.

For the longest time, I’ve been trying to get my neighborhood to build an artificial putting green (don’t forget the sand bunker) next to our pool.  How about that for a unique selling proposition?  How do you think the conversation would go when a prospective buyer drove into the neighborhood?  Man speaking to wife:  Look honey, they have a putting green.  I love this neighborhood already.

The HOA should have an External Communication function/person whose job it is to spread the unique selling proposition.  If your neighborhood does not have an external website, build one.  Get a neighborhood kid to spend a little time optimizing it for the search engines…he or she will know what to do.

Publish your community calendar, tennis matches, swim lessons, etc.  Take lots of pictures of different times of year and post those.  Calculate the number and age of the children and publish that because every mother I’ve ever worked with wants to know if there are kids her kids’ age to play with and the only place this information exists is with the existing homeowners.

Ultimate goal:  make your neighborhood desirable.  Market it.  Make someone in Iowa reading about your blooming azaleas in April drool to live in your neighborhood. Let them know what kind of people live in your neighborhood and that you all aren’t a bunch of raving lunatics!

A good time and place to start could even be right here and now.  Leave a comment to this post and tell us what neighborhood you live in and why it is a great place.  Go ahead…sell me on it.  Leave the url for you neighborhood website if you have one.

In the end, the value of your home is based on the comparable sales in your neighborhood.  If you can make your neighborhood the envy of the area and get people wanting it instead of just "taking a look," you’ll be more likely to get some solid sales at closer to list price and develop some price momentum.

Of course, you all need to be keeping you homes maintained and updated, particularly the kitchens, but marketing the neighborhood as only residents can do won’t cost you a dime, just a little time.  Go ahead, start today!

I received a phone call from a local newspaper yesterday asking for some real estate market analysis.  It seems that word has gotten out that I like to crunch the numbers.

Someone had forwarded the reporter a link to an article on CNN Money that listed Atlanta (and mentioned Alpharetta) as one of the six best places to buy a home based on prices expected to rise the most - or decrease the least - in the next 12 months.

How seriously should you take a list like this when Detroit (Farmington Hills) is on the list with you?  Isn’t the housing market in Detroit a train wreck?  Maybe the wreck has already happened and now they are just cleaning up.  After all, Ford did announce today a $100M of net income in Q1, a $382M increase over Q1 last year.

The CNN Money analysis was done by looking at the Metropolitan Home Price Index published by OHFEO and the "fundamental housing value," a measure also called the price-rent ratio which is derived by taking the price of a home and dividing it by the discounted value of the future stream of rent payments you could get for that house.  This is an investment based valuation method that says anything over 1 is overpriced (as an investment) and anything under 1 is underpriced.  CNN selected metro areas with high momentum and low price.

In selecting Atlanta, CNN singled out Alpharetta as a "typical affluent suburb" and pegged the average sales price at $359,950.  I could take exception with CNN that Alpharetta is typical, but that is an entirely different post ;->  Here I want to focus on the average sales price for Alpharetta, which is what the local reporter was looking for, too.

Average Sales Price in Alpharetta for Q1 2008

The average sales price in Alpharetta for Q1 2008 was $384,612.  This includes all resale and new construction single family residences.  The average for Q1 2007 was $372,895.

The change represents a 3% increase in sales price, but doesn’t tell the whole story.  The real story is that in Q1 2008 only 237 homes sold in Alpharetta versus 402 in Q1 2007.  That is $63M less sales volume than a year ago.

If you look at North Fulton as a whole, which includes the four cities of Alpharetta, Roswell, Johns Creek and Milton, the numbers show the same pattern on a different scale.  [Note:  it is a little difficult to separate sales in the City of Alpharetta from North Fulton as a whole because there are homes in Milton that have an Alpharetta postal address and homes in Johns Creek that have a Duluth/Alpharetta/Rowsell postal address, but I did my best based on high school districts.]

In Q1 this year, the average sales price in North Fulton was $423,503 vs. $413,791 a year ago.  However, again, that represents far fewer transactions:  474 in Q1 2008 vs 784 in Q1 2007.  To most sellers, that is the definition of a buyer’s market regardless of average sales price.

So, while the exposure given Alpharetta by CNN Money is nice to get, I’m not sure that their methodology, as with most "Best of Lists", is anything but hogwash.  Yes, we have price momentum.  Yes, real estate is priced more affordably to begin with in Atlanta and Alpharetta.  But CNN’s methodology doesn’t take into account the inventory that is not selling in this market and the effect that it will eventually have on the overall market.  Maybe sellers will just withdraw and wait until price recover.  Maybe they can’t wait and will reduce their price to sell.  Only time will tell.

CNN Money’s point in the whole story is that Alpharetta is a good place to buy because it has good potential for appreciation.  While I couldn’t agree more, because there are some many fundamental growth factors in favor of Alpharetta, the short term prognosis is dicier.  Alpharetta real estate prices are increasing; that is, we have positive price momentum which is what CNN Money was measuring.  However, you can only take advantage of that momentum if you are able to sell.  There were 310 fewer sellers realizing any gains this quarter and a year ago.

Now, on a slightly different slant, if you want to live in one of the skinniest counties in America (Marin County, CA was the skinniest), CNN Money has that coverage for you, too.  They actually compared counties based on the body mass of their residents.  But what if you have a county with just a bunch of mammoth-sized but lean residents, wouldn’t that skew the rankings?  Anyway, you won’t find anywhere in Georgia on that list, that much you can bank on.

No Picture Available.  Like shown on the left, that is what is displayed in the MLS when, duh, the agent has not loaded any pictures.

Pictures increasingly tell the story in our visual age.  That explains why home buyers who are browsing homes online are frustrated when they come across a listing with no pictures.  Can the seller even be serious about selling if they don’t post a picture?  Are they trying to hide something?

Would you be surprised if I told you that in February of this year, of the 65,663 Residential and Condominium properties listed in the Multiple Listing Service for the Atlanta metro area, 5,023 had no photos at all?  On top of that, 11,474 only had one photo, when the MLS now allows you to post 12 photos per listing. 

I’m not sure if it is malpractice or laziness, but it is unforgivable for a listing agent to not have at least half a dozen well-taken, well-lighted, well-cropped photos of the home they are marketing.  And solid quality photography should not be reserved only for million-dollar homes.  Digital photography is too inexpensive and easy to learn for every house for sale not to have a photo.

Additionally, the way that people and agents search for homes these days is with "saved searches."  Buyers have predefined searches (if you want one, just contact me and I’ll set you up) that automatically notify them of new homes on the market that meet their criteria.  If there is no photograph when that buyer gets the notification, that buyer is likely to never consider your home again.  You missed your shot.

Photography is a mini-hobby of mine and I take pictures of all sorts of things besides houses, but I’m always looking for ways to take and display house pictures better.  One of the coolest new tools I’ve found is piclens, and you can see an example here of some home photos I’ve taken of an awesome home for sale just north of Alpharetta in East Cherokee county.

As time permits, I’m also adding "face shots" of Alpharetta real estate to Zillow.  I don’t sweat every detail of these photos, but do post them to Zillow so that people using that service from out of state and relocating to Alpharetta can get a better feel for what the properties look like.  They might even call me when they are ready to move…if they like my style ;->

Lastly, I have a collection of what I call lazy realtor photos.  I’m not sure if these are humorous or sad.  For more on bad real estate photos, check out Athol Kay’s MLS Bad Photo of the Day.  Athol has carved a name for himself in the real estate blog sphere just by cataloging other realtors’ photo atrocities.

My Collection of Atlanta Real Estate Photos by Lazy Agents

Agent is either too lazy to get out of the car or doesn’t know how to crop a photo. 

This agent can get out of the car, but doesn’t know how to park on the street. 

This agent was (too) short ;->  Nice roof, though. 

This agent went to art school before real estate. 

This agent can’t see the houses for the trees. 

This agent was actually a fencing contractor! 

So, which is worse, a bad picture or no picture at all?  You should never have to find out. 

Hello, Buyers:  There are 1,004 homes for sales in North Fulton (Alpharetta, Roswell, Johns Creek and Milton) between $225,000 and $500,000.  If I were personally looking to buy, I’d be in the market.

It’s a buyers market yet people tell me every day that they don’t think they can buy a house.  Some buyers are scared by the recent mortgage industry trouble and don’t think they can get approved.  Other buyers think that they should wait longer because prices will continue to fall.  Let’s examine that thinking.

I’m not bankable after the sub-prime meltdown

The troubles in the mortgage industry have given some people the unwarranted impression that they can’t get a mortgage, particularly as a first time home buyer.  The facts are that the bulk of the sub-prime mortgage crisis was caused by “low doc”, “no doc” or “stated income” loans failing.  Basically there were loans available where all the borrower had to do was verbally tell the bank what their income was.  The interest rate wasn’t as good as “full doc” loans but, heck, it was a loan and it was often used by investors to purchase investment property.

The problem was that it was abused; people misrepresented their income and ultimately defaulted, particularly as interest rates inched up, as many of these loans were variable rate.  Most, if not all, major lenders are not offering the “no doc” loans like there were.

However, there are still many zero down payment loans available.  Wells Fargo, for instance, has six different zero down loans to chose from depending on your specific situation with purchase price of up to $417,000.  In North Fulton, there are 811 homes to chose from between $225,000 and $417,000.  Do you think we could find one that would work for you?

If you have an income (documenting it would be nice) you can get a loan, regardless if you have any money to put down.

The market is still going down; let’s wait some more

The market is definitely slower than a year ago, but mostly just in terms of the number of homes sold.  The average sales price is holding pretty steady and in North Fulton the Sales Price to List Price ratio is only down one percentage point to 96%.

The slowness in this market is notable in fewer homes being sold and the average time on the market going up. The table below shows sales data from August 2006 versus August 2007.  The data is only for homes listed with a realtor, so it doesn’t include private sales.  It is also for resale homes only and does NOT include new construction.

Compared to 2006, $45M less real estate was sold in North Fulton in 2007 and 125 fewer properties were sold.  Interestingly, though, the average sales price is UP over $30,000.

My opinion is that the “good houses” are selling and they are still selling for a decent price.  Houses that are not in top condition or “challenged” in some other way are either not selling or dropping off the market.  If you are a seller, you need to be aware that you have more competition – 1,004 homes on the market between $225k and $500k this year versus 832 the same time last year.  This is where the price pressure that sellers are feeling is coming from. 

The difference between the east side and west side of GA-400

The numbers above are aggregate for North Fulton.  When you look at just the east side, the average sales price has actually dropped about 2% from $431k to $422k in the past year, but the days on market hasn’t gone up as much as on the west side.  The average sales price on the west side has gone up from $403k to $478k.  I attribute this difference mostly to the affect that new construction on the west side is having on resale values:  you can barely find new construction under $700k and the resales are taking advantage of this by bumping their price and daring buyers to find something cheaper – even in this market!

What does all this mean?

If you are considering buying, I think that now is a good time.  Prices aren’t going to go that much lower - and on the west side they are actually still going up significantly.  Interest rates are at or below 6% in many cases and there are loan programs to help you with down payment.

If you do the math, a $300k loan at 6% for 30 years is roughly $1,800 per month.  Throw in a little for taxes an insurance and you are at $2000/month.  Compare that to your rent and then give me a call!

While every trend is towards wireless these days, Georgia is going wired.  At least, for real estate transactions, that is.  While going wired in this day in age might sound regressive, Georgia will actually be catching up to what other states already do.

Here’s the problem:  When certain mortgage companies went bankrupt last month they wrote a lot of bad checks on the way.  HomeBanc, for instance, is said to have written $20M of bad checks for loans that were to close the day they went bankrupt.

The way real estate purchases work in Georgia is that they are handled by a real estate attorney.  The attorney collects funds from all parties involved in the transaction (buyer and lender) and disburses funds to the seller, the seller’s mortgage company if there was a loan, the real estate brokers for commissions if they were involved, surveyors, home warranty companies, local governments (for taxes due) … the list goes on.  Essentially the attorney is a clearing house for the transaction and manages funds through their escrow account.

What happened last month when the lenders’ checks bounced was that the attorneys were left holding the bag.  They paid off seller’s loans, wrote commission checks and disbursed sales proceeds to sellers only to have the buyer’s lender’s funds bounce.  The escrow accounts of many law firms in Georgia went negative, a big no no if you’re the escrow account holder.  Essentially the attorneys became the lenders for the new buyers, which is not the business they are in.

This left attorneys scrambling to cover the funds.  Reportedly some were mortgaging their own property and tapping into credit cards looking for a short term fix.

Here’s the solution:  For a longer term fix, the Georgia Bar Association convened to review the “Georgia Good Funds Law”, the law that defines what constitutes “good” money for a real estate transaction.

In the past, lenders were able to mail (FedEx) checks to the attorney a few days in advance or the loan officer could even bring a check to closing.  Buyers, if they needed to bring cash to close on the property, could bring a certified check from their bank, or if less than a thousand dollars or so, could write a personal check.

No more, if the lawyers get their way, and I suspect they will.

In the future expect that all funds will have to be wired in advance of the closing.  The attorneys want to make sure the funds are really in the bank and this is the only way without waiting for checks to clear. 

Here’s the ramification:  This means that buyers will have to plan ahead to wire funds.  Wiring money is not an instantaneous transaction and can take hours if not a day.  Many transactions may become “dry closings,” that is, you sign all the documents but there is no money yet because the wires have not come in.  And buyers, keep track of your wire confirmation number.  That is the only number that the attorney can use to check if your funds arrived.  Your name is not on the wire!

All in all, these changes aren’t necessarily bad, just inconvenient because they will make a closing take longer.  In cases where you are selling one property and buying another “back to back” on the same day, you may face some logistical challenges.  My advice would be to try to close both transactions with the same attorney.  If the first transaction is dry, the second will be dry, too, and sellers are just going to have to be patient in receiving their funds.

Other states have lengthy closings and have been able to make it work:  Virginia doesn’t disburse funds to the seller until two or three days after closing and California requires that the deeds be recorded at the courthouse before funds are disbursed and possession taken of the property.  That can take over a week.

So look at it this way:  Georgia is actually taking a step forward by doing away with paper and personal checks and using electronically transferred money only.  It is a safer way for everyone involved, particularly the attorneys.

Now if we could just make some progress in reducing the amount of paper (and FAXing, in 2007 for Pete’s sake) in the real estate contract part of the transaction and make it more electronic, then we’d be making some serious progress!