As many local real estate agents have said lately, it’s a seller’s market here.
“I would say there’s definitely an undersupply of new construction and they are moving very well, so I think what you’re seeing is builders try to keep up with the demand, but to some extent they can’t build them fast enough, which is a great thing,” said Harry Norman agent Johnny Sinclair, who also serves on the Marietta City Council.
As an example, he pointed to the Traton Homes Rockford development near Marietta High School on the west side of town.
“It turned out to be some of the most successful subdivisions in Cobb County last year, and it is completely sold out,” Sinclair said.
Countywide, housing permits tallied 141 in July, up by 38 from the 103 recorded in the same month last year. And permits for single-family homes are up to 982 year-to-date, compared with 668 for that period last year.
“There’s not a lot of inventory, so if something that is in really good shape or it’s priced really well goes on the market it pretty much sells immediately, and therefore anybody who’s in the market for a new home, and there’s a lot of them, they’re snapping them up pretty fast,” Sinclair said.
The numbers for Smyrna are equally upbeat. It issued only 35 permits in 2008 and 40 in 2009, but climbed to 203 last year and 165 thus far this year, according to Smyrna community development director Ken Suddreth.
It’s all a far cry from the trough of the recession in 2009, when Marietta issued exactly one new home permit during the entire year.
That said, there are potential problems on the horizon. The Associated Press reported last week that new home purchases around the country fell sharply in July, possibly because mortgage rates are finally beginning to rise. Those rates have gone up by a full point just since May, it was reported. Meanwhile, mortgage applications from potential buyers have fallen by more than a full percentage point since then, the AP said.
Sales of new homes fell 13.4 percent in July to an adjusted annual rate of 394,000, the slowest pace in nine months, according to the U.S. Commerce Department. The figure for June, by contrast, was 455,000, which in turn was substantially less than the 497,000 figure originally reported by that department.
Is such a slowdown a good thing? For the agents who are finally seeing business increase and the home sellers finally seeing their home values start to rise again, no. It’s not so good for homebuyers either, considering that the suddenly climbing mortgage rates are taking a bite out of what they can afford to buy. We all know that home sales are a major driver of the local and national economies, and that no one can afford another collapse of the home sales market.
As Dan Greenhaus, chief global strategist for institutional brokerage BTIG told the AP, “The spike in mortgage rates is slowing the pace of improvement. Given the speed at which housing was improving, and the growing talk of a renewed bubble, some moderation, assuming it doesn’t materially worsen, is not a terrible outcome.”
The bottom line? A slight slowdown probably is better than a continuation of the recent torrid pace.