Lindsey Ramsey - Harry Norman, REALTORS®
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Lindsey Ramsey – Harry Norman, REALTORS®
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2018 Wrap Up

Hi folks- It sure has been a minute since I last imparted my real estate knowledge on you.  The last several months I have been investing in my career development in addition to helping people buy and sell homes.  I am happy to announce that I earned my Associate Brokers license just a couple weeks ago!  This license will open up possibilities for my future if I should choose to be a managing or qualifying broker one day. What it translates to today is greater knowledge of my trade.  Here’s a picture of a very happy me with my license.  I even have it hanging on the refrigerator with my kid’s artwork!  All that to say, 2018 has been a fantastic year for me professionally.  I exceeded my personal production goal, more than doubled my business from 2017, achieved the Senior Marketing Specialist designation within my company and successfully completed the course work and tests to earn my brokers license.  Whew!  I can’t wait to see what 2019 holds for me.

Let’s take a look at how 2018 rounded out in the Real Estate market.  Hold on to your Santa hats because my gift to you is graphs.  This first chart* shows the mortgage rate fluctuations in 2018.  Mortgage rates change constantly.  Like multiple times a week.  I realize this chart has a lot of numbers in small scale but the overall picture is that 2018 started around 3.94% and we are ending the year close to 4.81%  I bet it will change between the time I type these words until the time I finish this blog.  You may be thinking to yourself, self, 1% difference isn’t really that much.  Well, when you scale 1% against hundreds of thousands of dollars in loans it can make a significant difference to some people.  That 1% difference is actually a 22% increase over the 12 months of 2018.  Do you have health insurance?  I guarantee if your health insurance increased 22% this year you would have reason for pause.  Let us break this down into more real-world numbers.  Say you thought about buying a home with a $200,000 loan in January at a 3.94% interest rate.  30 year fixed mortgage.  With no down payment your monthly mortgage payment would be $1,438.  For some reason, you decided not to make the purchase but wait a few months.  Maybe you wanted to sell your current home, wait until a child graduates, wait for job transfer etc… Let’s fast forward to November of 2018 and now you are ready to make the move.  All factors remain the same except now the interest rate is 4.81%.  That makes the monthly mortgage payment $1,541 for the same house.  That is only $103 additional per month.  That’s not awful, right?  Well, that $103 monthly is $1,236 annually or $37,080 over the life of the 30-year loan.  That makes the rate hike pill a little harder to swallow, doesn’t it?  I can think of several things I’d rather do with $37,000.  That’s a kitchen renovation or college tuition!! Before anyone gets too analytical let me say that different loans, different mortgage bankers/brokers, escrow companies, annual taxes, insurance costs and a plethora of other factors come into play.  I’m just using basic numbers for an easy comparison.  So what can you do with this information?  Well, you can’t predict the future and neither can I.  Mortgage rates have been increasing steadily all year so chances are we may see a few more increases before we plateau out again.  My suggestion is to weigh out the reasons you are postponing a move.  Is that reason significant enough to absorb another 22% increase over 2019?

Let’s move on to the good news, shall we?  I took a look at the average list price and sales prices of residential detached homes in 3 areas.  I’m showing you a 5 year look so you can see that we have been steadily increasing over time but I am focusing my number only on the peaks of 2018.  Our focus areas are Cobb County as a whole, Marietta High School and Walton High School districts.  Look to the left and you will see that for all of Cobb County the average LIST  PRICE peaked in April of 2018 at $407,710.  To the right you will see that in Marietta High School District the average LIST PRICE peaked in August at $413,128.  The final graph in this section for Walton High School has experienced a bit more chaos over the past 5 years. The 2018 peak average LIST PRICE was in September at $767,801 but clearly over the years there have been other significant peaks.  When you think of a list price you should think ‘dream goal.’  As a seller this is what you HOPE to receive for the purchase of your home.  Of course, the challenge is finding a buyer willing to offer you your dream goal price.  As we enter into 2019 let us all remember that a list price is not a given.  It is not a promise of what you will walk away with.  It should simply be an educated and well-researched approximation of value according to current market conditions, neighborhood dynamics and condition of home.  I know I”ve said it before but so many sellers get stuck on their list price and consider anything less as ‘giving up money.’  A list price isn’t tangible.  It is not money you ever had.  How can you give away something you never had.  Now a contract price, that’s a number we can grab on to.  Why am I harping on this, because sellers tend to focus on what homes in the neighborhood are currently listed for.

Common scenario: Realtor: My suggested listing range for your home is $250,000 – $260,000.  Seller:  Well the Simpsons down the street have the same floor plan and they have their home listed for $350,000.  Realtor:  How long has their home been on the market? (obviously I already know the answer because I’m an awesome Realtor)  Seller:  A year and a half and we have all the same updates.  If they can ask $350,000 why can’t we?  Realtor: Mr. Seller, through my extensive research of your neighborhood and area no homes have sold over $275,000. Ever. Are you interested in selling your home or just listing your home? It seems as if the Simpson’s are interested in just listing their home.  After a year and a half on the market in a great area, with beautiful updates all that leaves us is the price.  Perhaps the Simpsons dream goal will remain just that.  A dream.  Let’s talk about your dreams.  We discussed that you want to move to California to start an acting career.  Will listing your home $100,000 above fair market value get you closer to that dream.  Seller: Well, no but I hate to give up so much money.  Realtor: Did you ever have $350,000 in hand to ‘give up’.  Seller: Well, no.  Ahhh, I’m beginning to understand.  Maybe we should list near $250,000 so I can make the move.  Besides, I bought the place for $150,000 a couple years ago so it’s not like I’m losing money.  Realtor:  I think that’s a fantastic idea.  Glad you came up with it 🙂

Ok, Ok, I might have had a bit of an agenda there.  What I want my sellers to focus on is SALES PRICE. Not LIST PRICE.  With that said, let’s dive into the SALES PRICE stats for Cobb County. As you can see on the graph to the left the peak in 2018 was in June with an average Sales Price of $350,721.  That is a 7% increase from June of 2017.  Do you see the difference between Average LIST price versus average SALES price for Cobb?  It is a $57,000 difference.  Man, we sure are hopeful when it comes to our dream price aren’t we.  On average homes in Cobb County are SELLING approximately 16% lower than LISTED.  We are taking a broad look at the county stats.  There are definitely homes in the county that sold at list price or even above list price.

Onto Marietta High School.  It appears that we are experiencing a bit of atrial fibrillation in MHS district with chaotic peaks and valleys.  The good news is that the graph trends upward over the past 5 years.  We may take two steps forward and one step back but that is still progress!  The peak sales price occurred in May at $364,363 but November held its own at an average sales price of $358,254.  Not too shabby.  As a resident of this school district, I am pleased with the increase we continue to see in home values in our area.  To be sure the recent improvements to parks, greenways and the Marietta Square factor into the desirability to live in town at a premium price.

Walton Highschool District.  What can I say?  It is a world of its own.  Home prices (list and sales) are consistently higher than all other areas of Cobb County.  The schools in this district are top rated but you aren’t any closer to the interstate or a city center.  It’s a bit of a phenomenon.  I have my thoughts on home prices in this area but I am trying to be objective so I shall keep my trap shut.  Walton HighSchool average sales price peaked in August 2018 at $741,346.  That’s only $26,000 below the average list price for the district.  So if our LIST stats peaked in September but our SALES stats peaked in August what does that tell you?  It should tell you that people saw good numbers in July/August so with all that optimism they listed a bit higher in September.  But guess what, the sales average in September was $539,226 so your evil plan to get all the monies didn’t work.  Whomp, whomp.

Friends, I have so many more graphs I can share with you.  Stats don’t lie.  Not all of us are numbers people (myself included) but they are important because they guide us through big decisions armed with facts and not fantasy. My hope for you in 2019 is two-fold.  1st I hope you call me when it comes time to buy or sell a home.  Referrals are always welcome too!  I mean, if you know a friend moving out of the area I can help her.  If you have a family member moving into the area I can help them.  Basically, I can help anyone in the U.S. who is moving in some capacity.  My 2nd hope is that when you do call me you set aside a little time for education.  Sure, it’s fun to just jump right into looking at homes or putting yours up on the market, but understanding the process and intelligently tackling the challenge can make for a much smoother process and realistic expectations.  See you in 2019!

 

  • *Mortgage rate chart from www.ycharts.com.  All graphs from FMLS.

 

 

 

 

 

 

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