Posts Tagged ‘Intown Atlanta Housing’

Homebuyers squeezed out of the market

June 13, 2017

Last week there were a series of articles published by the Wall Street Journal, CNN Money, and more describing how Millennials are being squeezed out of buying homes. For the most part, articles focused solely on lending requirements. Honestly, that misses the mark on what is really going on out there right now. Let’s dig into this a little more.

The articles primarily focused on how lending guidelines are stricter. While that is true when compared to 2007, lending requirements have loosened up quite a bit over the past several years. Here are some quick examples:

  • Conventional loans allow borrowers with a credit score of 620 (the same as FHA). Average credit is 660-680 depending on what article/source you read, so home buyers with below average credit can qualify to purchase a home.
  • Smaller down payments are back. VA and USDA loans do not require a down payment, FHA only requires 3.5% down, and Conventional loans can be used to buy a home with as little as 3% down.
  • Self-employed borrowers with an established business of 5+ years can qualify to buy a home with only one year of tax returns.
  • Condos can be purchased with as little as 3% down.
  • Rental income from investment properties can be used even if the property hasn’t been rented out for two years.

Lending guidelines are much more lenient today than they were just a few years ago. That isn’t really the problem.

A Washington Post article from January discussed the elephant in the room, and nailed it when it comes to the issue that all home buyers are facing – inventory.

I attended a Realtor meeting recently where a stat was given stating there is less than a 3-month supply of homes available in in-town Atlanta. A balanced market is a 6-month supply, and nationwide the supply of homes is well under 6 months. That’s not good. Think it is bad in Atlanta? It’s worse in Seattle. The lack of inventory puts Millennials (and any home buyer with a smaller down payment) at a disadvantage. Also, it is pushing home values higher than a normal market due to the impact of supply and demand.

How does one compete in this market? A few things come to mind.

  1. Home buyers must go out and look at homes as soon as they are listed. This can be difficult depending on one’s schedule, but homes are going under contract in a few days in most cases.
  2. Home buyers should be underwritten prior to going out to look at a home. This way the offer letter isn’t a prequalification letter or pre-approval letter, but the letter can read the home buyers are “approved to purchase a home pending a satisfactory appraisal, clear title, and sufficient insurance coverage.” That is much stronger than a simple “prequalification” letter, and I go into more detail this in a previous blog post.

By planning and being ready to move on a home at a moment’s notice, home buyers can increase their odds of getting under contract on a home.

Looking to purchase in Georgia? Wanting to get ahead of the game? Contact me today, and we’ll get started toward achieving the goal of your home ownership!

Looking for homes in a seller’s market

September 2, 2014

blog-author-clayjeffreys3

The second quarter housing statistics for the Intown Atlanta market are in, and the numbers confirm we are still in a seller’s market. Some quick numbers to review:

  • homes for sale between $200,000 and $500,000 currently have a 2.5 month supply on the market
  • overall in the Intown market, there is a 3.7 month supply of homes to buy
  • the only homes on the market that have more than a 7 month supply are homes priced over $1,000,000.

Ideally, there needs to be around a 6 month supply  of homes on the market. When the housing supply is at 5 months or less, it becomes a seller’s market. When the housing supply gets over 7 months, it becomes a buyer’s market.

The current lack of inventory makes buying a home very competitive. As a buyer, you must be ready to make an offer on a moment’s notice. That is why it is imperative to speak with a mortgage loan originator prior to going out to look at homes.

I’ve worked with a few clients this who looked at homes over a weekend, and then called me on the following Monday to get prequalified. After a few minutes on the phone, I have enough information to provide a prequalification letter. By the time they got back to their agents that Monday, the homes were already under contract.

Before you go out to look at homes, get prequalified. If you are buying a home in Georgia, contact me today. We can get you prequalified in a few minutes to you are ready to make an offer as soon as you find a home. If you wait around, the home will be gone before you know it.

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