Atlanta Luxury Housing Market Continues To Go Strong
While housing sales overall were down 20 percent in June for Metro Atlanta, the luxury housing market is still going strong. Sales of million dollar homes are double what they were just two years ago. While the lower and middle segments of the Atlanta real estate market struggle with tighter credit, lower demand, and excess inventory, the high end is doing very well.
And if you think about it, it makes perfect sense. The economy is doing well and in cities like Atlanta that have not experienced soaring real estate valuations their is not much pressure for pricing retractions. While San Diego and northeastern cities experienced tremendous appreciation in their property values, Atlanta just increased its 5–7 percent. So now that other parts of the country are retracting, Atlanta real estate still has value in it.
So the luxury market is still going strong for Atlanta and it is no surprise. Finding the loan is harder than qualifying for the loan in this segment is still the biggest challenge for most buyers. And writing a jumbo loan in Atlanta with it’s lower appreciation will still be easy as valuations have been moderate so the risk for the lender is less.
The well-to-do remain largely immune from the mortgage and credit crunch. They have the financial wherewithal to avoid risky loans, like the subprime ones where homeowners pay above-average interest rates. They have liquid assets. And a buyer’s market means they can afford more house.
The typical luxury home buyer covers one-third of the sale price with cash, according to the Luxury Home Council, a Realtors’ trade group. The median down payment for everybody else: about 9 percent…
“The higher you go, more often than not, buyers pay cash and less of the closings are contingent on financing,” says Dac Carver, managing broker with Beacham & Company, Realtors.
Unlike California or Florida, Atlanta home prices haven’t raced out of control, so buyers aren’t necessarily stretching their finances to get into pricey houses. Lenders this year have initiated only 60 foreclosure proceedings against Atlanta-area residential property owners with mortgages of $1 million or more, according to EquityDepot.net. Overall, lenders initiated 36,380 foreclosures in 12 metro counties.
“The upper end is probably insulated from [the downturn],” Reed says. “An interest point here or there doesn’t make much of a difference to them. And most of them can afford to buy more house than they’re buying anyway.” via the ajc.com
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Comment by eric on 2 September 2007:
This is good news especially, if most of these high-end buyers are buying with cash. We may start to see some changes with people who have to finance their purchase in this price range, as lenders have started tightening up their lending requirements fro these “Jumbo Loans”.
Comment by Carson Matthews on 2 September 2007:
It’s so important to keep Atlanta’s home buyers and sellers focused on our local market. The national market condition is having a huge psychological impact on Atlantans and their impression of what’s going on locally. This market will certainly weed out the uninformed & unqualified.
Comment by Nassau Real Estate on 7 May 2008:
It was good info. Thank you.