Is it a good time to buy a home in the Metro Atlanta real estate market?

Posted on:  05/16/2020

I caught up with Teri Khimani, my realtor, to discuss the real estate market in general, and also deep dive in the Metro Atlanta market, particularly through the lens of the current Covid-19 situation. I wanted to find out if and how the real estate market has been affected during this time.

Teri is my real estate agent, she has helped me sell my last home – in only 3 days. She also sold my neighbour’s home and is now helping me find my new home after living in an apartment for about a year. This post mostly follows the video we recorded together in May 2020 and is in the form of an interview with Teri Khimani. You can find Teri Khimani at www.terikhimani.com.

Teri, thanks for joining me, why don’t you introduce yourself?

Teri Khimani: I have been a realtor with Keller Williams for about 5 years now, and I'm a local expert in the Atlanta Metro Market.

The question I have been asked most often, for the Metro Atlanta area is: ‘Considering the situation the world is going through right now, is this a good time to buy a home?’

Teri Khimani: It is, Chris, and we'll look at some data to support that. Right now, in the Atlanta Market, I have not noticed much of a change or difference. I am not an economist – I am a realtor, so I can just look at the data that we have on our market and our ZIP codes. I try to kind of educate my clients based off what the data shows.

Teri, is this a buyer’s market or a seller's market? And also, what's the difference between a buyers’ market and a seller's market? 

Teri Khimani: Yeah, we have been in a seller's market, and in the seller's market, they have all the power. There has been a low inventory of listings, the prices have been top dollar. There have been tons of buyers, so the sellers have been able to demand certain prices and people are paying.

That is the market that we have been in. It would be the opposite, for a buyer’s market: it would be tons of inventory and the buyers would have the power to possibly offer less or negotiate in their best interest. But right now, we are in a seller's market and this means low selling inventory and tons of buyers.

That’s absolutely true, Teri! As we experienced yesterday – I took half the day off, we went to find a house up in Cobb County, which is in Metro Atlanta (the city was Marietta), we found a house that I loved, we put an offer in for 8,000 dollars over asking, and we were paying the closing and  somebody put in another offer that beat mine. So, it is a seller's market in my opinion too!

Teri, before we look at some data for Metro Atlanta, here’s a quick map of what Metro Atlanta looks like, in case we have people outside of Metro Atlanta:

When I say Metro Atlanta, we mean the city of Atlanta right there in the middle. I am currently residing in DeKalb County. I am looking for a house in either Cobb County or Gwinnett. The house that Teri sold last year is in Henry County.

I think Teri, you are going to show us some Henry County data and then we will look at a zip code in Gwinnett County.

Teri Khimani: Yes, I wanted to talk about Stockbridge, which is the 30281 ZIP code, south of Atlanta. That's the first one I'm going to look at. Then I'm going to talk about Snellville, where I actually have a listing. That's going to be the 30078 ZIP. Both are counties in the Metro Atlanta area.

The first ZIP code that I wanted to exemplify was the 30281, which is Stockbridge: If we look at this year versus last year’s data – especially at new listings in January, February, March, April - we don't have any data for May right now, because we're just in there - every month has gone up, except for April and February:

April was the month we started to shelter in place, so the numbers for April are a little skewed, but if you see for majority, we're right on track, just as we were last year.

Next, I wanted to look at our pending sales. If you look at January compared to last year, it's up 13 percent, February was up 4%, March was up over 3.5% and then April, again decreased a little bit, but we should be seeing the May data at the end of the month:

The closed sales is the most important one: these are homes that have sold for this area (the Stockbridge area) this year, compared to last year. January took a little bit of a decline, February also, but March was up over 6.5%, and then April took a little bit of a decline:

Teri, you showed the homes that have sold: how much did they sell for, can you tell us, if you have that data?

Teri Khimani: I could show you individually, however, the most important one that I want to point to is the closed sales volume for this year versus last year - and the most important thing is that the prices have not declined. So maybe less homes have sold, but the value and the sales price has not changed.

In January, we see an increase of 2%, February did take a little decline, but it was not much; in March we were up over 11%, and then in April it was up over two percent:

So that's a good thing for sellers and people buying - the home values are not decreasing. Maybe the numbers have decreased a little bit, but the values aren't going anywhere. 

That’s also important when you look at the market: you have your average sales price. These have not declined at all this year - they've actually increased every single month:

The average sales price in the Stockbridge area has increased This tells us people have equity in their home and this equity is continuing to grow. If you're buying now, or you have bought from last year,  you can see it: in January, they've gone up 9%, February half a percent, 4% in March, and in April we see an increase of over 10%.

Bottom line, very important for buyers and sellers: know that the home values are increasing.

This was Stockbridge, in Henry County, which is south of Atlanta. What about Snellville?

Teri Khimani: For some data from the north side of Atlanta, the Snellville market (30078 ZIP code), we can look at new listings. In January they were up, February went down a little bit, March was up and then April took a little bit of a hit again. I think that is due to the sheltering in place starting.

If we look at the pending sales, January was up 23%, February is not much of a difference - it went from 43 to 41 pending sales, March went from 76 of 70, and then April had the biggest dip, from 76 to 49:

But if you look at the closed sales, they were up over 10% in January, February up 21%, March and April took a little bit of a hit:

But again, the same thing: if we look at the closed sales volume for this county, it has increased by almost 23% in January, almost 30% in February, which is a huge increase – again, this is because the home prices are increasing in this county:

They did take a small hit in March and April and then again, the sales prices - which is the equity in people's homes, the values of the homes - they did not decrease at all this year compared to last  year. They went up, even in April by over 5%, March 10% and a bit:

Teri, here's another question I got: What are closing costs and who usually pays the closing costs?

Teri Khimani: The closing costs are usually the buyer’s responsibility – they are your pre-paid taxes, insurance, attorney fees, lender fees – all of these are your responsibility, as the buyer. 

However, a lot of the times we can get the sellers to pay these, or if there are some new construction builders – the majority of them will pay these closing costs for you, if you’re using their lender. Bottom line, they are the buyer’s fees, but as a realtor, I always try to get those taken care of for my clients as much as possible.

Teri, are new builders ever offering incentives, I think you mentioned that they do?

Teri Khimani: Yes, they do, some of the bigger builders, like DR Horton, Century Community – they offer certain incentives to their buyers if they use their preferred lenders. I just had a client going to contract last week and DR Horton was offering $9,000 towards their closing costs, to use their lender, so it's a huge incentive.

Someone who is a first-time home buyer wants to know what fees are associated with buying a home, can you tell us something about that?

Teri Khimani: There are some little hidden fees, associated with buying a home, on top of the usual down-payment and closing costs: 

• There are the home inspection fees. I encourage everyone to get a home inspection when they are buying.
• The appraisal fee, which is charged by the lender to get the home appraised.
• The earnest money, which is a small amount put towards the sale price of your home. This is usually held by either your realtor or your attorney, and is not kept or lost, but it goes towards the purchase of your home when you close.

Thank you, Teri, I appreciate your time. 

You can reach Teri Khimani at 678.967.1712, [email protected] or www.terikhimani.com 

Watch the entire interview below:

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