HOME TRENDS

Local realtors make their predictions for the 2016 market

By Kathy Dean

The recent Federal Reserve interest rate hike has raised questions and concerns about where the housing market is headed. While no one can know the future, Atlanta Realtors have high hopes for the upcoming year.

“The 2016 outlook is, in a word, excellent,” said Scott Askew, President of Engel & Völkers Intown Atlanta. “I hope that Jonathan Smoke, Chief Economist with Realtor.com, was correct when he made his predictions for markets that “are poised for a substantial growth in prices and sales” next year. He named north Atlanta as the fifth best market in the U.S. during 2016.”

Specific aspects that will impact Atlanta’s housing market are interest rates, lending regulation changes, popularity of Intown neighborhoods and availability of inventory.

Interest Rates

Lisa Johnson, Vice President/ Managing Broker with Atlanta Fine Homes Sotheby’s International Realty–Intown office, noted that, based on recent history, 2016 is likely to bring steady growth and consistent sales. Even with the Federal Reserve’s rate increase, interest rates are still amazingly low compared to years ago.

Rates are now in the 4-percent range. According to Vic Miller, Managing Broker at Coldwell Banker Residential Brokerage–Intown, interest rates remain low by historical standards and most homebuyers understand that.

“The recent hike, however minor or symbolic, will impact those with tight credit and limited income, but we have to remember that rising rates usually signify an overall improvement in the economy, which translates to more job opportunities, raises and promotions,” Miller explained.

Another positive aspect to the interest rate increase was brought up by Christopher Burell, Senior Vice President and Managing Broker of The Intown Office, Harry Norman, Realtors: it’s likely to motivate buyers to take action and move forward with their home purchases. “While I don’t believe we’ll see a drastic change in interest rates, I suspect it will be just enough change to have a direct impact on buyer mindsets.”

Anne Miller, Associate Managing Broker, Berkshire Hathaway HomeServices|Georgia Properties, Midtown office added that rates will probably continue to rise slightly over the next year, especially since the market usually sees some rate volatility in an election year. “Still, I bought my first home when interest rates were at 17 percent, then anxiously waited for rates to fall below 10 percent so I could refinance,” she remembered. “That market can’t compare with our rates today!”

Lending Regulations

In addition to the Fed putting an end to almost a decade of near zero interest rates, there have been other changes in ensure that buyers are able to afford the loan commitment and that the property is solid in its appraised value,” Burrell said. “I suspect that as we get further into 2016, some lenders will loosen their restrictions, as long as we continue to experience economic growth and a somewhat stable job market.”

According to Vic Miller, funding remains available for consumers who meet the classic lending standards, including proof of income and solid credit, yet the process has become more demanding. Lenders are double- and triple-checking job status, salary and the city to become a desirable, go-to destination for young professionals.

“Kirkwood, Edgewood, Adair Park, Capitol View, Capitol View Manor, Pittsburgh, Peoplestown, Lakewood, Mechanicsville and West End will continue to grow in popularity,” he added. “Personally, I’m looking forward to seeing how the redevelopment of Fort McPherson and Turner Field play out.”

On a side note, Askew also expects the real estate business to see more mergers and acquisitions as larger companies continue to grow their footprints. Conversely, more small, hightech firms, sans the brick-and-mortar, will open in an effort to attract millennials.

“I think the excitement and popularity of Old Fourth Ward, Edgewood and Inman Park will continue,” Johnson predicted. “Many wonderful projects are being built that create an energy and synergy in the market.”

As more companies bring their businesses back to areas like Midtown, Downtown, West Midtown, Decatur and Buckhead, there’ll continue to be a strong demand for housing in the Intown neighborhoods.

Intown development will be driven by two major forces for several years to come: walkability and the Atlanta BeltLine, according to Burell. “Unlike other geographic boundaries like lakes, rivers and mountains that limit and divide regions, the BeltLine is unique because it’s a geographic boundary that actually connects neighborhoods which have been isolated in the past. This creates the rebirth of a connected city.” the housing industry. New TRID (TILARESPA Integrated Disclosure) regulations went into effect October 2015.

While Anne Miller reported a slight slowdown in closings in the past month, she thought it was likely due to a slightly delayed turnaround time for closings due to the new regulations. “I think this will normalize over the next few months, though, once our industry settles in with the new closing guidelines.”

Johnson stated that up until now, it has been a pretty smooth transition. She hasn’t seen many issues or delays, but cautioned that it may be too soon to know whether these regulation changes will have any further affect in 2016.

“The new federal laws, policies and procedures create a cautious lending environment. Lenders want to lend, but they’re taking additional steps to credit scores right up until closing. “The pendulum has gone from liberal to conservative and we’ve got to get back to the middle.”

Popular Intown Neighborhoods

Atlanta is touted as the best city for millennials. About 13.5 percent of Atlanta’s population is between the ages of 24 and 35, Askew pointed out. The active, varied job market, affordable housing and vibrant nightlife have caused

He added that, at the same time, the BeltLine is creating a boundary and limiting the amount of available land within its circle. Developers and investors are purchasing land in and around the BeltLine, even in sections of town where it hasn’t been completed, and there’s been a direct impact on home and land values.

Anne Miller agreed that areas near the BeltLine will continue their popularity in the coming year. “I also think we’ll see some growth in areas just inside the Perimeter, due to affordability and easy Intown access for work or play.”

Inventory Availability

While Intown neighborhoods are hot spots for home ownership, it’s not easy for everyone to find what they want. It’s still a sellers’ market, but a stronger

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