Every week, we ask an Atlanta real estate professional for their thoughts on the top trends in Atlanta real estate.
This week, we talked with Todd Emerson, the senior vice president and managing broker of Harry Norman, Realtors at its Atlanta Perimeter and Blue Ridge Offices. A real estate professional since 1998, Todd is not only the president-elect of the Atlanta Board of Realtors, but also serves as vice president of administration and finance the chairperson of the Governmental and Community Affairs Committee.
In addition, Todd is also actively involved in the Georgia Association of Realtors and National Association of Realtors. He is a graduate of GAR’s Leadership Academy, has been a state director for the last five years, is a contributing member of the Legal Action Committee.
Atlanta Agent (AA): We saw many reports in 2012, main relating to home prices, that Atlanta’s housing market was behind the eight ball; now in 2014, though, we’re seeing the exact opposite. What has changed?
Todd Emerson (TE): A big driver is that we finally liquidated a good percentage of our distressed inventory, whether in the form of a short sale or a foreclosure. In October, for instance, only 1 percent of our sales were foreclosures, and two years ago, that number was 30 percent – so that really was what drove prices down.
What cleared out that distressed inventory was a combination of investors coming into the market and housing policy – Atlanta was one of the test markets where they sold off big blocks of 100-150 units to investment consortiums that were looking to buy up big chunks of property, so that helped us move through that inventory quickly.
AA: Another topic that we hear about all the time is the lending environment, and how lending, at least according to the major trade associations, remains overly restrictive. How is lending in your area of Atlanta?
TE: We’ve seen it soften. The stranglehold that banks had over the last couple of years has loosened, certainly as property values began to rise this year in Atlanta, and people who probably could have gotten a mortgage 18 months ago now have access to financing. We’re certainly seeing some of the local community banks being more to the front of that wave.
Also, what we’re beginning to see now is people who were in a distressed situation in 2008 and 2009 and had to sell their house via short sale, those people are now starting to come back to the market. We’re going to see a lot of that in 2014.
I think there’s still a little room for improvement. Back in the heyday, when you’re talking about the percentage of American who owned homes, it was above where it should have been. We have our own in-house lender, it’s a joint venture between us and Wells Fargo, and we’re even seeing Wells loosening up their standards. It’s mostly underwriting, where the underwriting is not asking for every single piece of paper under the sun.
So I think in terms of debt-to-income ratios, employment, salaries and things of that nature, those are probably where they need to be, but some of the monotony that the underwriters have been asking for in terms of additional documentation, that’s where we can afford to loosen a little bit more.
AA: Finally, are there certain types of homes, or characteristics of homes, that you’re finding to be the most popular with homebuyers?
TE: We had a sales meeting this morning and we were just talking about this. What we’re finding, as the buyers continue to come into the marketplace, is that regardless of the buyer segment, the properties that are moving in Atlanta are those that we call “HGTV Ready.” So many people have been watching these reality shows on HGTV that feature homes with all the natural products, whether it be wood, stone, tile, etc.
That’s what’s driving their purchasing. When they walk into a house, if it’s dated or you can tell there’s deferred maintenance, they’re in the door and their out; they don’t even bother. They’re looking for a move-in, perfect home. Whether it’s a two-year-old home or a 30-year-old home, the updates need to be there. We find that’s what driving the buyer mindset.