North Atlanta Real Estate - 2006 Review by kdrewien

north atlanta

Real Estate Review 2006 A Community Service of North Atlanta Realty Group

Admit it—sellers kind of hoped it would last forever; after five years of record-breaking sales, buyer’s find today’s shifting markets a relief Let’s be clear: Most markets are a far cry from depressed, especially when compared with 1982, when the 17-plus percent rate on a 30-year fixed mortgage and a 13.8 month supply of homes combined with a slow economy to make the perfect housing storm. Still, it’s definitely a different world. Consumers appear to be taking a momentary breather from housing while they consider the future direction of home prices and interest rates. “People are starting to panic a little bit because suddenly the market forces they’ve been relying on for the past few years have changed,” says Kathy Drewien, founder of Atlanta Real Estate Consultants and North Atlanta Realty Group. “Perhaps the most important new dynamic is the power shift that has occurred between buyers and sellers. The ramifications of this shift reverberate through almost every market.” According to the National Association of Realtors® , the monthly supply of home inventories rose to 7.3 months in the 4th quarter of 2006. Here in North Atlanta, the supply is comparable with 7.2 months supply. Extensive media coverage touting a “housing bust” has also created a wait-till-it’s cheaper mentality among some buyers. For buyers, of course, this is good news. “The fundamentals—increased inventory, more room to negotiate, low interest rates—are actually very good for buyers right now,” says Drewien. “But that doesn’t mean it’s a bad time to sell. Realtors® have to know the market and what’s happening there. Even in a correcting market, housing in some communities sells faster than in others.” The Real Estate Review 2006 examines the North Atlanta housing market from a broad geographic area, narrows to a county level and then refines the analysis to high school communities.

Additional copies are available for $24.95 from Atlanta Real Estate Consultants, 2625 Sandy Plains Rd, Suite 100, Marietta, GA 30066. Request by emailing 2006review@AtlantaREConsultants.com or calling 770-321-4005.

North Atlanta

Real Estate Review 2006

North Atlanta Market Area The market area of North Atlanta includes the communities in Cobb County east of I-75, Fulton County east and west of GA-400, south Cherokee County, Gwinnett County west of I-85 and, south Forsyth County. These areas are further defined by the cities of Marietta, Alpharetta, Roswell, Dunwoody, Sandy Springs, Buckhead, Woodstock, Norcross, Duluth, Suwanee, Buford, Sugar Hill and Cumming. The map pinpoints these cities within the respective counties. In the chart below, the market area is further defined by high school districts and zip codes.

Community East Cobb: Marietta

School

Zip Code

Lassiter

30062, 30066, 30075

Marietta

30062, 30066, 30067

Pope Sprayberry Walton Wheeler Fulton (northwest of GA400): Milton Alpharetta and Roswell Roswell Fulton (northeast of GA400): Alpharetta Alpharetta and Duluth Centennial Chattahoochee Northview North Springs Fulton (outside I-285): Dunwoody, Sandy Springs Riverwood

30062 30062, 30066 30062, 30068 30067, 30068, 30339 30004 30075, 30076 30004, 30005, 30022 30022, 30075, 30076 30005, 30022, 30097 30005, 30022, 30024, 30097 30328, 30350 30319, 30327, 30328, 30342

30305, 30324, 30327, 30342 30309, 30318, 30319 Etowah 30102, 30189 Cherokee (south) Woodstock Woodstock 30114, 30189 Cherokee 30114 Duluth 30092, 30096, 30097 Gwinnett (west of I-85) Norcross, Duluth, Suwanee North Gwinnett 30024, 30518 Buford, Sugar Hill Norcross 30092, 30096, 30097 Peachtree Ridge 30024, 30043, 30096, 30097 Forsyth (south): Cumming South Forsyth 30005, 30024, 30040, 30041, 30097 Fulton (inside I-285): Buckhead

North Atlanta

Real Estate Review 2006

North Atlanta

Market Activity—North Atlanta Activity - Single Family Homes 14000

The current inventory of 7,494 homes is approaching 60% of homes sold in all of 2006. With a decreased number of pending sales, the market is getting hit at both ends—increased inventory and decreased activity.

12468

10000

7494

8000

Current Inventory Pending Sales

6000

2006 Closed Sales 2006 Sales by Quarter

4000

1082

2000

24.33%

25.81%

Market Activity 35.76%

1st Qt r

Quarterly sales percentages show a slight downward shift from the 2nd quarter to the 3rd quarter. The 15% decline between the 2nd quarter and 4th quarter has given rise to the media hype of “housing bust.” As expected, the market is correcting itself after five years of unnaturally high housing prices.

39.45%

2nd Qtr

3rd Qtr

4t h Qtr

Inventory Supply of Homes—North Atlanta Inventory Supply - Single Family Homes 7.2

8.0

According to the National Association of Realtors® , the monthly supply of home inventories rose to 7.3 months in the 4th quarter of 2006. In North Atlanta, the supply of single family homes is comparable with 7.2 months supply. Inventory supply is a simple calculation of the “absorption rate” in the market; calculated by dividing the number of homes currently for sale by the number of homes sold in the last 12month period.

7.0 6.0 Months

Number of Homes

12000

5.0 4.0 3.0 2.0

An inventory supply (absorption rate) of 6 or 10 months means that the existing inventory is taking longer to sell. Sellers have increased competition which means, as always, the best-looking and best-priced homes will sel first.

1.0 0.0

North Atlanta

Real Estate Review 2006

Inventory Supply by Price Range—North Atlanta This graph represents the month’s of inventory supply by price range. Houses priced below $300,000 have the lowest months inventory—just a small margin less than those priced between $300,000 and $400,000.

30 25 20 Months

Clearly, the largest inventory is in the higher price ranges which includes a large percentage of new construction.

Inventory Supply - Single Family Homes

15 10 5 0 0 to 200K

200 to 300K

300 to 400K

400 to 500K

500 to 750K

750 to 1MM

1MM 2MM

2MM +

Market Activity by Price Range—North Atlanta The inventory supply represented here shows the number of homes currently for sale (in yellow) compared to the number of homes sold in 2006. The graph also shows that the largest number of buyers were in the $200,000-$300,000 range.

Market Activity - Single Family Homes

2MM to 4MM 1MM - 2MM 750 to 1MM

Approximatley 58% of the home buyers purchased property priced under $300,000. Of those, 41% were in the less than $200,000 range.

235 111 727 503

741 653

1173

500 to 750K 400 to 500K 300 to 400K

1716

2006 Closed Sales 1362 1134 2217

1472

200 to 300K 0 to 200K

Inventory

921

3493

1091 2413

Number of Homes

North Atlanta

Real Estate Review 2006

Inventory Supply by Community窶年orth Atlanta Community East Cobb: Marietta

School

Zip Code

Lassiter

30062, 30066, 30075

Marietta

30062, 30066, 30067

30062 30062, 30066 30062, 30068 30067, 30068, 30339 30004 30075, 30076 30004, 30005, 30022 30022, 30075, 30076 30005, 30022, 30097 30005, 30022, 30024, 30097 30328, 30350 30319, 30327, 30328, 30342

North Atlanta

The market area of North Atlanta includes the communities in Cobb County east of I-75, Fulton County east and west of GA-400, south Cherokee County, Gwinnett County west of I-85 and, south Forsyth County. These areas are further defined by the cities of Marietta, Alpharetta, Roswell, Dunwoody, Sandy Springs, Buckhead, Woodstock, Norcross, Duluth, Suwanee, Buford, Sugar Hill and Cumming. The map pinpoints these cities within the respective counties. In the chart above, the market area is further defined by high school districts and zip codes.

North Atlanta

Real Estate Review 2006

Market Activity by Community—North Atlanta Num ber of Hom es

This graphs on this page examine the market data by geographic community. East Cobb reports the largest number of home sales followed by home sales in North Fulton (above the Chattahoochee River). Inventory supply in Gwinnett (west of I-85) and south Forsyth almost equals the total number of sales—a 12-month supply. The lowest supply inventory is in North Fulton east of GA-400; a 4.3 supply of houses. East Cobb follows with 5.4 months; then, North Fulton west of GA-400.

500

1000

1500

2000

2500

3000

1314

East Cobb

3500

2928

867

Fulton (NW GA400)

1640 868

Fulton (NE GA400) 465

Fulton (outside I-285)

775

602

Fulton (inside I-285)

2231

938

Inventory

869

Cherokee (south)

1261

2006 Closed Sales

1394 1432

Gw innett (w est I-85) 961 994

Forsyth (south)

Inventory Supply by Community—North Atlanta Inventory Supply - Single Family Homes 0

Fulton (NW GA400)

Fulton (outside I-285) Fulton (inside I-285)

6.4 4.3 7.2 7.7

Cherokee (south)

North Atlanta

5.4

East Cobb

Fulton (NE GA400)

8.3

Gwinnett (west I-85)

11.7

Forsyth (south)

11.6

Real Estate Review 2006

Inventory Supply by Community—East Cobb Inventory Supply - East Cobb 36.00

2MM +

32.00

1MM - 2MM

33.81

750 to 1MM

20.97

500 to 750K

18.96

400 to 500K

16.57

300 to 400K

15.86

200 to 300K

3.72

0 to 200K 0

The The current average inventory inventory of supply 7,494 in homes East Cobb is approaching is 5.4 months. 60% ofUpon homes closersold examination in all of 2006. we see With 21-36 a decreased months of number supplyofin pending price ranges sales, $500,000 the market and above. is getting hit at both ends—increased inventory and Approximately decreased activity. 26% of the total supply is new construction. Of Quarterly these, 60% sales arepercentages priced above show a slight $750,000.; downward 28% are shiftinfrom the the 2nd $500,000-$750,000 quarter to the 3rdrange. quarter. The 15% decline between the 2nd quarter and 4th quarter has given rise to the media hype of “housing bust.” As expected, the market is correcting itself after five years of unnaturally high housing prices.

Months

Market Activity by High Schools—East Cobb Market Conditions by High School District 800

Active

700

Sold 2006

600 500 400 300 200 100 0

Lassiter

Marietta

Pope

Sprayberry

Walton

Wheeler

Sales in thetoSprayberry district According the National Asso, the monthly surpassed Walton ®by almost 200 ciation of Realtors supply home inventoriessupply rose houses.ofNew construction to 7.3 months 4th quarter97 in both districtsinisthe comparable: of 2006. In North the new houses in the Atlanta, Sprayberry supply single districtof and 102 family in the homes Waltonis comparable with Wheeler 7.2 months district. Lassiter, and supply. Pope follow with 66, 46 and 35, respectively. Inventory supply is a simple calculation of number the “absorption The greatest of home rate” in theinventory) market; calculated by sales (and in the higher dividing the number of Walton homes price ranges are in the currently for sale by the number district—184 homes above of homes sold the last 12$500,000. Thisincompares to 65 month homes period. in the other districts (excluding Marietta). An inventory supply (absorption rate) of In 6 or monthsMarietta means NOTE: this10review, that existing inventory is Highthe School is limited to houses taking longer zip to sell. haveis, in the 30062 codeSellers area and increased which of therefore, competition not a true reflection means, as always, the best-looking and best-priced homes will sell first.

North Atlanta

Real Estate Review 2006

Inventory Supply by Community—Fulton (Northwest) This area of Fulton County— west of GA-400 and above the Chattahoochee River—shows a similar pattern to other North Atlanta communities. Homes in the highest price ranges (which include the majority of new construction) have several months of inventory. In these ranges, it makes more sense to reflect the number of years of supply instead of months.

Inventory Supply - North Fulton (Northwest) 52.00

2MM +

30.51

1MM - 2MM

16.85

750 to 1MM

7.84

500 to 750K

6.17

400 to 500K

5.58

300 to 400K 200 to 300K 0 to 200K 0

2.60 2.19 10

Months

Market Activity by High Schools—Fulton (Northwest) The greatest number of homes sales above $500,000 occur in the Milton High School District. As a result, the inventory levels in this district are also high.

Market Activity by High School

900

814

800 700

666

600 500

Inventory 457

Sold 2006

400

331

300 200 100 0

North Atlanta

Real Estate Review 2006

Milton

Rosw ell

Inventory Supply by Community—Fulton (Northeast) Inventory Supply - North Fulton (East of GA-400) 42.00

2MM + 19.61

1MM - 2MM 9.70

750 to 1MM 6.07

500 to 750K 400 to 500K

4.40 4.39

300 to 400K 200 to 300K 0 to 200K 0

2.72 1.92 5

The average current number inventoryofofmonths 7,494 inventory homes is approaching is 4.67 in the60% areaofof Fulton homes County sold in all east of of 2006. GA-400 With a and decreased above the number Chattahoochee of pending River. sales, the market is getting hit at both ends—increased inventory Higher and decreased ranges show activity. slower sales with 3.5-years in the $2MM+ Quarterly range salesand percentages 1.5-years in show the a slight $1MM-$2MM downwardrange. shift from the 2nd quarter to the 3rd quarter. Properties The 15% decline under between $500,000the are2nd performing quarter andbetter 4th quarter with ahas 4.5 given months rise to the supply media and hype 2.7-months of supply. “housing bust.” As expected, the market is correcting itself after five years of unnaturally high housing prices.

Months

Market Activity by High Schools—Fulton (Northeast) Market Activity by High School Inventory 700

Sold 2006

646

600

535

500 400 300 200

253

214

109

100 0

264

229 53 Alpharetta

Centennial

Chattahoochee

Northview

Chattahoochee HighNational School and According to the Asso® , the monthly Alpharetta School include ciation ofHigh Realtors supply of number home inventories rose the largest of sales priced to 7.3 months in theand 4th146, quarter above $500,000; 148 of 2006. In North Atlanta, the respectively. supply of single family homes is comparable with 7.2 months supply. Inventory supply is a simple calculation of the “absorption rate” in the market; calculated by dividing the number of homes currently for sale by the number of homes sold in the last 12month period. An inventory supply (absorption rate) of 6 or 10 months means that the existing inventory is taking longer to sell. Sellers have increased competition which means, as always, the best-looking and best-priced homes will sell first.

North Atlanta

Real Estate Review 2006

Inventory Supply by Community窶認ulton (Outside I-285) Inventory levels in the Dunwoody and Sandy Springs areas of Fulton County are similar to those in the Buckhead and Brookhaven areas. The highest amount of inventory (slower sales) is in the $2MM+ range with a 2-year supply of homes. This decreases to a 1year supply in the $1MM-$2MM range and a 9-month supply for homes priced $750,000-$1MM.

Market Activity - Fulton (Outside I-285/Below Chattahoochee River) 45

2MM +

22 91

1MM - 2MM

750 to 1MM

102 156

500 to 750K

228

400 to 500K 300 to 400K

138

200 to 300K 11

Inventory

145

Sold 2006

0 to 200K 25 0

100

150

200

250

300

350

400

Number of Homes

Market Activity by High Schools窶認ulton (Outside I-285) There are two high schools in the zip code geographic review for Dunwoody and Sandy Springs. Although a few more homes sold in the North Springs district, the sales are balanced between the two.

Market Activity by High School Inventory Sold 2006

100

90 80 70 60

50 40 30 20 10 0 North Springs

North Atlanta

Real Estate Review 2006

Riverw ood

Inventory Supply by Community—Fulton (Inside 285) Market Activity - Fulton (Inside I-285) 95

2MM +

221

1MM - 2MM 750 to 1MM

500 to 750K

105

400 to 500K

300 to 400K 34

191 130 253

134 139

Inventory Sold 2006

200 to 300K 624 0 to 200K 04 0

100

200

300

400

The The market current activity inventory for Buckhead of 7,494 and homes Brookhaven is approaching areas of60% Atlanta of are homes reflected soldininthis all ofgraph. 2006. This With a area decreased shows anumber large number of pending of home sales,sales the in market the price is getting rangeshit at above both$750,000. ends—increased inventory and decreased activity. Inventory supplies in the higher price Quarterly ranges sales are 8-12 percentages months; show in contrast, a slight other downward communities shift from of the North 2nd quarter Atlanta to have the6-8 3rdyears quarter. of inventory The 15%indecline the same between ranges.the 2nd quarter and 4th quarter has given rise to the media hype of “housing bust.” As expected, the market is correcting itself after five years of unnaturally high housing prices.

500

Homes

Market Activity by High Schools—Fulton (Inside 285) Market Activity - North Atlanta High School

Inventory supply is a simple calculation of the “absorption rate” in the market; calculated by dividing the number of homes currently for sale by the number of homes sold in the last 12month period.

600 400 200 0

Number of Homes

1000 800

928 590 Inventory Sold 2006 North Atlanta

There is onlyto one highAssoAccording thepublic National ® , the monthly school included in this Buckhead ciation of Realtors supply of homearea inventories and Brookhaven of Fultonrose to 7.3 months in the 4th quarter County. of 2006. In North Atlanta, the supply of single family homes is comparable with 7.2 months supply.

North Atlanta

Real Estate Review 2006

Inventory Supply by Community—Cherokee (South) The chart compares the existing inventory of homes to the total homes sold in 2006 by price range. Woodstock has a large number of homes represented in the ranges under $300,000. Unlike some of the other communities in North Atlanta, the majority of the current inventory are resale homes—not new construction. There is a relatively low number of inventory homes in the higher price ranges; however, an even lower number of sales reflects an inventory supply of 6-years in the $750,000-$1MM range. It is even higher in the next range—and 8year supply.

Market Activity by Price Range

2MM + 1MM - 2MM 750 to 1MM 500 to 750K

0 1 1 8 3 18 26 60 50

400 to 500K

Sold 2006 Inventory

92 123 145

300 to 400K

418

200 to 300K

243

0 to 200K

640

302

100

200

300

400

Number of Homes

500

600

700

Market Activity by High Schools—Cherokee (South) The greatest number of homes sold in 2006 are located in the Cherokee High School district.

Market Activity by High School - Cherokee (South)

Existing inventory in each school district is almost 50% of total 2006 sales.

700

Number of Homes

600

656

500

496

400

494

300 200

304

Inventory

247

207

100 0 Cherokee

North Atlanta

Real Estate Review 2006

Etow ah

Woodstock

Sold 2006

Inventory Supply by Community—Gwinnett (West) Inventory Supply - Gwinnett (West of I-85) 75.00

2MM +

The 6-year inventory of homes clearly overshadows the other price ranges. Even so, Gwinnett’s explosion in growth is evident with an abundance of homes on the market in all ranges.

19.29

1MM - 2MM

16.30

750 to 1MM

18.88

500 to 750K

17.50

400 to 500K

This area of Gwinnett—west of I-85—shows the largest supply of inventory in the $2MM+ price range than all North Atlanta communities in this report.

12.78

300 to 400K

11.04

200 to 300K

7.24

0 to 200K 0

M onths

Market Activity by High Schools—Gwinnett (West) Market Activity by High School - Gwinnett (West of I-85)

In three of the four high school districts, current inventory is already 50% of 2006 closed sales. The result is a 6-month supply of homes for sale.

Inventory

1400

Sold 2006

1353

Number of Homes

1200 1000 800

747 600 400 200 0

714

523

445 266

Peachtree Ridge

251 Norcross

225 N Gwinnett

Duluth

North Atlanta

Real Estate Review 2006

Inventory Supply by Community窶認orsyth (South) In five of the eight price ranges, inventory supply exceeds a 12month supply of homes. The others ($200,000-$500,000) are showing a 6-8 month supply.

Market Activity by Price Range - Forsyth (South)

2MM +

The greatest number of homes sold are equally represented in two price ranges below $400,000.

8 14

Sold 2006 Inventory

1MM - 2MM

112

750 to 1MM

148

500 to 750K

180

159 400 to 500K

129

293

300 to 400K 200 to 300K

220 292 186

0 to 200K 0

100

150

200

250

300

Number of Homes

Market Activity by High Schools窶認orsyth (South) The South Forsyth high school district is the only one within the North Atlanta market research analysis. Future research will include Central Forsyth in the 30040 zip code. This market continues to expand with new growth.

Market Activity by High School - Forsyth (South)

Inventory Sold 2006

Number of Homes

1200 1000

1011

800 600

635

400 200 0

South Forsyth

North Atlanta

Real Estate Review 2006

Year End Summary—Atlanta Multiple Listing Area We are reporting very different year-end statistics than we did a year ago. At the end of 2006 we had a down housing market compared to the end of 2005 when housing was really exploding up. There were 80,308 closings for all single family in 2006. This was still an increase over 2005 by 2.5% or 2,000 closings. Detached single family was up 1.2%. In December 2006 there were 5,549 closings for all single family homes. This is a decrease of 14.2% from December 2005—the 4th consecutive monthly decline. Detached single family was down 14.3% or the 5th consecutive decline. The average sale price for single family detached was $260,723 for 2006 Many records were broken for expired and withdrawn listings for the year. There were 56,094 expired listings for single family— almost 5,000 more than 2004’s record high. There were also 21,942 withdrawn listings for all single family—4,200 more than 2005’s record high. Days on market ended the year at 79.3 for all single family. As you can see, months supply is much greater for the “high priced” new construction and has increased dramatically over the past year. In 2007, demand for the lower priced resales and discounting on high priced lots for new construction should reverse this trend. Interest rates need to remain low and employment levels remain high, so that housing can rebound in 2007. This should be by the end of the second quarter or in the third quarter 2007. Data on this page is provided by Steve Palm, Smartnumbers, as a service to First Multiple Listing Service. Data source for all other pages is First Multiple Listing Service courtesy of Atlanta Real Estate Consultants.

North Atlanta

Real Estate Review 2006