We get lots of comments from the public and from other real estate professionals about our digital billboards around the Atlanta area. The billboards display the exact number of homes for sale in Atlanta after taking out the “duplicates”.
When the billboards were originally erected a few years ago, the number of homes for sale was around 74,000. Over time, the number climbed to over 110,000 in early 2007. Six digits became the norm for months and months and the billboards were featured on Good Morning America and referred to in various media as the semi-official barometer of the Atlanta real estate market.
Then the market changed as credit tightened drastically and qualified buyers became as scarce as Mets fans in Atlanta. At first the billboard number kept growing and growing – local builders and other sellers who previously didn’t think they needed to list their properties for sale with professional real estate licensees began listing just to expose their properties to the smaller group of buyers looking. Billboard-watchers became alarmed that the huge number of homes for sale would cause buyers to shop around forever, looking for just the right “steal”.
Beginning in late 2008, though, the number of homes for sale in Atlanta began dropping. It was 81,085 on January 6, 2009, below 80,000 by May, below 75,000 by August and still dropping.
I started a contest within my department (Broker Support) to guess just how low the number on the BHGRE Metro Brokers billboard would go in 2009. Some expected it to bottom out in the summer. John Rausch, Timothy McFadden, Charlie Ratcliff, Charles Morrow, Bridgette Freeman, Will McGowan, Dexter Dix, Carolyn Nicholes, Charity Cason and I and even Kevin Levent (our President and CEO) submitted their “how low will it go” estimates.
John, Timothy and Charity were eliminated by June (optimists, obviously). I was knocked out in August, along with Dexter and Kevin. Bridgette, Carolyn and Charles hung in there until November. Only two remain – Will McGowan, who estimated 58,900 and Charlie Ratcliff, who looks like he is the sagest of the sage, with his estimate of 62,500. On December 31, 2009, the billboard read 65,121. Congrats Charlie!
So, why is the number of homes for sale in Atlanta dropping?
What was happening to cause the number of properties for sale to actually decrease amidst constant media stories of foreclosure after foreclosure? In my opinion, several factors were at work:
* Obama’s program to incent lenders to modify or refinance loans in trouble (www.makinghomeaffordable.gov) was finally getting a little traction, slowing the number of desperation sellers
* Real estate agents and lenders became more experienced at working out “short sales” and allowing homes to sell and close,
* Sellers who didn’t absolutely HAVE to sell, held back and stayed in their homes,
* The $8,000 first-time homebuyer tax credit spurred many buyers to go ahead and make a commitment to a home (the now expired $1,800 Georgia Tax Credit also helped),
* Banks held back on their foreclosed inventory, deciding to rent out or simply hold many properties until the market improves,
* Interest rates stayed very low.
And I’m sure other factors were probably involved, too.
Let me know your guess.
Now, how low do you think the number of homes for sale will drop to in 2010? And where do you think it will be at the end of 2010? I’d love to hear your thoughts.