How's Decatur Weathering the Recession?
Decatur Metro | November 12, 2008Take a look at the paper today and you’ll see that DeKalb is looking at a potential $40 million budget deficit, and Mayor Franklin is channeling GM and asking for a “federal rescue plan” for their shortfall thanks to the economic slowdown.
So why haven’t we heard similar cries from our own city commission room? …aside from when the mayor chastised the governor for reneging on the homeowner tax relief grant a couple months back.
Hmm…aside from being fiscally responsible, do you think that THIS might have something to do with it?
So far, Decatur’s housing market is proving more recession resistant than most. (and yes I see that # of sales are down…but at least average price is UP)
Now I’m not saying that we won’t need to tighten our belts going forward. Or be more conservative withour revenue…I don’t have the inside scoop on any of this. But charts like this are somewhat reassuring .
Thanks for the graph Mr Metro. Interesting feature!
I’m going to go out on a limb here and say that with the number of houses sold in decline and the median price going up, high-end housing is what is selling.
Taxus, that be coh-rect! Because who keeps shopping when times get tough? People with options, that’s who.
Curse that disposable income! Where can I get some?
Interesting graph, but not as reassuring as it could be. Eyeballing the graph,
in the last quarter, sells fell from close to 225 in Q3-2007 to 125 in Q3-2008, a rather larger percentage decrease, of something like 40%.
The shift up in median price is probably due to a decreased number of sales, concentrating on the most expensive homes. Not something that should give those in the middle much to feel good about.
Sorry for the initial downer post. But on financial matters, a bit of a paranoia these days can save you a lot of money.
Hey, DM, did you see graphs on other ZIP codes? Wonder how they compare to each other and 30030?
Scott,
Where can you get some of that cursed disposable income?
Well, Sir, I’m assuming you are smart enough to figure that out and and have a strong enough work ethic to succeed in your endeavor.
I thought disposable income came from those blue and yellow bags that get put out every week,
Appreciate the confidence, Taxus, but I keep looking down at my Converse All Stars and can’t figure out where the bootstraps are.
Seriously, though ML is correct that the graph doesn’t really offer folks in the middle anything reassuring *today*, it is still a very hopeful indicator. As I mentioned, it reflects the choices of those in a position to make choices and those people continue to choose Decatur. For many of Decatur’s middle class, their home is their primary investment. This makes it clear that that investment is on far better footing than in many other areas locally and nationally.
Where you *don’t* want to be living right now is somewhere those with options are categorically avoiding. And there’s a lot of them.
I’ve been considering the first responses to this post on and off since last night.
I knew when I posted it that I would still get the “but sales are still down, so this higher number only means the rich are buying!”. I know because I got the same response when I posted Q1 a few months back.
And I admit its a mixed bag. But even in this environment where my survival instincts encourage paranoia, I can’t help but be a bit optimistic. I offer two additional observations:
1. As taxus and Scott noted…this higher number sales price indicates that the more wealthy among us are still buying. I buy this to an extent…as long as I can look past the fact that $350k isn’t really that expensive in this town anymore. And why is this a bad thing? Isn’t it a good sign that the rich (with the disposible income) see Decatur as desirable? Isn’t this a better trend than if sales AND price were down.
Also, a Realtor friend of mine recently told me that it seems like the $250k and below market is the only one still really selling intown. This graph bucks that trend.
2. Also, in your paranoia, think twice about comparing sales levels in Q3’08 to those in the last few years. We all know now why sales rates were so much higher then. I wish this graph went back further…but look at early ’03. I don’t remember a frozen housing market back then…and selling rates look generally comparable to now.
Steve, here are a few other areas: 30307, 30316, DeKalb County. Oh, and just to compare ourselves to a far less fortunate area…here my old zip from when I first moved here. 30032. Think we’re a little better off than these folks?
the impressive increase in median price (up +/-40% since Q1’07) with a simultaneous decrease in sales volume (down +/- 30% since Q1’07) defies logic, doesn’t it? these trends are especially perplexing in the context of price trends regionally and nationally. no doubt it is likely due to the sale of more expensive homes (or fewer sales of cheap homes) and the “flight to quality” to one of atlanta’s most desirable areas – decatur. but with the recent news that georgia trails only pitable michigan in job losses, it is difficult to believe that even the most bullet-proof areas real estate values will be impacted. or maybe emory will make decatur real estate values recession proof?
From my observations, I think many of these homes are selling to transplants from higher valued markets. I personally know at least 4 people who recently moved to Decatur from southern California. They think 350,000 is a steal compared to what they had out there. That’s good news though. It seems that people moving to Atlanta find Decatur quite appealing. In earlier times these transplants from more expensive markets might have gone to East Cobb. Now they want sidewalks and charm.
We just were able to sell our home in Oakhurst within a week just by posting on the
Yahoo group board. We had two families look, both were very interested.
Home buyers are out there, but you have to price your home realistically and make sure it is presentable and in “ready to inhabit” condition. In the current market, a home that is going to need some “work” is the kiss of death to selling. There are far too many homes from which to choose, so if you are considering/needing to sell…do the upfront work needed and you will reap the rewards for your efforts.
DM, thanks for the links to other ZIPs. Maybe 30308 also, which has a large number of condos as well as Midtown neighborhoods with reasonable sized single family and some apartments.
That’s great Jim!
Our experience looking over here at Oakhurst is that the houses priced $350,000 (maybe even $400,000) and below and that are in decent condition are moving very quickly. The houses that I’m seeing sit empty for month and even years are the new construction $600,000 + homes. They’ve even started putting some of them up for lease.
We’re also in Oakhurst and recently had two homes just around the corner, both priced in the $600s, move within 2 months or so. One was a massive rehab of an original bungalow; the other was fairly new construction about 5 years old. Both were well executed.
Also, both were located on a really good block. My guess would be that the stagnant higher price homes that Decaturguy refers to are either on blocks that still need some work or have some key executional errors (one example being the terrible 4-6 foot deep porches found on many of the newer homes, but there are certainly others).
As Jim noted for these competitive times, you’ve got to be offering something valued and desirable.
Same thing over here in Ponce Heights. As long as the house is in good shape with reasonable upgrades, and its priced correctly they sell pretty quick, regardless of cost.
As has been already stated, its the houses that need “work” and the infill (mostly on Clarion in our ‘hood) that sit on the market indefinitely.
Soooooo… why are folks buying in Decatur as opposed to other areas? I have my own opinions, but I’m wondering what others think. What is the biggest driver of 350K home sales?
Schools. Predictable growth. Cohesive community. Walkable amenities. Responsive government. High level of city services.
Maybe not in that order, but I think that hits the bigees.
I agree with Scott…police dept as well…
DM – Clarion? I thougt those were nice homes on that street…but of course I’ve never really studied the homes there…
Not sure I understand about Clarion. Just drove through there today – there are no homes for sale on Clarion. One of the few streets that currently has nothing available. Lots of nice new construction, including a castle at the end of it, but it’s all sold.
Clarification: the reference to Clarion was only in regards to “new construction”, not “houses that need work”. Dedogur, a couple of the recently built new construction homes sat on the market forever…one even went (or came close to going) into foreclosure.
Clarion has some great houses on it newbie. But it seems to have been developed post-war, as opposed to most of the development on Nelson Ferry, Woodlawn and Coventry which is mostly prewar.
As such, the original homes are a bit smaller and have less ornamentation. While houses on the other three streets are more easily expanded due to their larger size and huge unfinished attics, the “American Small Houses” on Clarion don’t easily “adjust” to the high-end modern living that all the wealthier folks moving into town want/expect. As such Clarion as seen more teardowns than the rest of the neighborhood. Judging from the infill, I’d say in the last 10 years…a longtime resident could be more precise.
Also, there are a few ranches on the street with a characteristic larger lot…inviting larger homes that utilize all 40% lot coverage. The brick mansion, which recently replaced the ranch that had a tree fall through it, is a good example of this. SHUDDER.
Steve, here’s 30308. Anybody can search by zip at http://www.city-data.com.
If you look around metro Atlanta there are really not that many nice cohesive communities that exist. There are some nice upscale areas intown but many look like the outside the perimeter suburbs or the main arteries through these intown areas are so snarled with traffic its just simply unpleasant. Decatur really is an absolute gem in the traffic hell that is Atlanta. I really don’t see prices going down…only up. Because there is a recession doesn’t mean that everyone is doing bad…there will always be people that are doing well..and not just the rich. It stands to reason that Decatur will continue to do well as it basically comes down to quality of life, an intelligent/enlightened community, and most importantly the aesthetics (or aesthetic potential) of the place.
Thanks for the link to city-data, DM. I’ll do some comparisons on my own when I have time.
I have personally observed this good news trend over in the Sycamore Ridge neighborhood – one house went under contract in October after only 3 weeks on the market; 3 others that went on the market in June were closed and sold before school started.
A key to viewing that chart is understanding the distortive effects of a lot of condo construction the past few years. When 335 Ponce or the Artisan goes up, it dumps dozens of properties on the market, and as a result the sales volume and price numbers are skewed. Condo rollouts do not come in steady increments, as existing single family homes for sale do.