Velma Brennan is a Realtor with Harry Norman, Realtor in Atlanta.
Every week, we ask an Atlanta real estate professional for their thoughts on the top trends in Atlanta real estate.
This week we talk with Velma Brennan, a Realtor with Harry Norman, Realtors in Atlanta.
Atlanta Agent (AA): In a recent story, we wrote that despite everything that’s happened in housing the last six years, consumer interest in homeownership is still strong as ever; why do you think that is?
Velma Brennan (VB): I’ve been selling real estate for more than 20 years, and for my clients, the American Dream of homeownership still prevails. Plus, there are still many advantages to owning; for instance, you can make changes to a home, and build equity. For most people, that’s a goal of theirs.
Even during the downturn, the sentiment was still there. However, people were hesitant to make purchases, and it was very difficult to get a loan; for some people, that was an obstacle they could not overcome.
Investors, though, loved picking up all those properties at a discount. For them, it was not only an investment, but the rental market was quite strong. The rental market is still strong, but there are very few rentals currently on the market, and people are finding that equity has come back, albeit gradually.
AA: We also reported that among the 50 states, Georgia has a relatively high market share for new construction; what’s the new construction market like in your respective markets?
VB: I am definitely seeing new construction. Everybody loves to buy a new house at least once, but what we’re seeing in my markets is that there’s a huge demand and not as much supply; builders are struggling to keep up.
Back in 2004 and 2005, you could go into a subdivision and have four or five homes to look at, because builders were constructing many specs. The market has changed now, though, and buyers will often have only two or three to choose from, if even that many, because they’re not sitting on the market.
There’s also the issue of financing. Builders would like to build more, but banks are not financing as much. Previously, builders could attain financing for two or three homes on spec, but banks are not lending like that anymore, so there are many more pre-sales; builders are getting their money upfront and then going to the bank. It’s much easier to finance that way.
New construction is going to get better. I do think we’ll see more spec homes. However, it’s not going to get back to where builders had several homes in several communities just waiting for buyers.
AA: Finally, housing inventory in the Atlanta area has been on the rise; are you seeing more active listings in your markets, though?
VB: Yes and no – it depends on what part of town. In some areas, we’re seeing more inventory come on the market, but there’s still a shortage. The homes that are sitting on the market are sitting for a reason – they’re either over-priced, or they’re in poor condition for the price. So people are waiting for a certain home to come into the market.
It’s starting to get better, because we’re entering the spring buying season, but I think it’s going to be awhile before we see many homes on the market. And again, it depends on the area. In the hot areas, homes sell quickly if they’re priced well and in good condition.