Norcross Real Estate 2011: The Good, the Bad and the Ugly

This is an annual update of the real estate market for the City of Norcross.  

The Good

We start with the good. As the year comes to a close, inventory is down. 206 homes have  sold this year vs. 158 in 2010. Buyers are beginning to tire of waiting for the market to change and if they have a home to sell they are choosing in many cases to lease. This frees them up to take advantage of the fantastic values and the historic low interest rates.

As inventory is depleted values will at some point begin to rise. There are currently 56 homes on the market in 30071. Statistics show that only about 17 percent of these homes will sell at their current price. The other homeowners will either adjust the price or will take their homes off the market.

The Bad

The bad news, of course, is that values continued to decline in Metro Atlanta. The average price in Norcross was $135,860 in 2010. The average price in 2011 was $88,279--a 35 percent drop in average sale price. Of these homes, 100 sold for $50,000 or less. Values dropped  approximately 5 percent in the month of October alone in metro Atlanta.

Inman news reported that home prices fell from September to October, in 19 of 20 markets tracked by the S&P/Case-Shiller 20-City Composite Home Price Index, with prices in Atlanta and Las Vegas hitting new lows and Midwest markets including Detroit, Minneapolis and Chicago also showing weakness. Cumulatively, the 20-City Composite was down 1.2% from September to October and 3.4 percent from a year ago. With home inventory declining we can hope for values to stop this decline and begin to slowly increase.

And the Ugly

The ugly, Gwinnett tax records list 190 homes as either bank-owned or scheduled for auction in Norcross. According to nationwide statistics, reported by Core Logic, for every 2 homes that sell,there is one in the shadows. That means we have homes that are distressed properties lurking in the background and this shadow inventory will become the short sales or foreclosures of the future. 

Approximately 150 of homes sold in 30071 in 2011 were distressed properties either foreclosure or short sales. A short sale is simply when a lender agrees to take less in payoff of the existing mortgage. It is not a simple process. The last one I closed took over 4 months. I have others in process right now that we have worked on for months.

The advantage to the seller, the ding to his credit is not as severe as a foreclosure. In most cases, but not all, the deficiency is forgiven. For the lender it costs less to take the short sale, than to do a foreclosure.  For the buyer, they get an excellent buy, but the cost to them is in time and patience. Not everyone is a short sale buyer so work closely with your agent and know what you are facing.

Our challenge for 2012 is adapting to these new values and educating the public about current market conditions. As long as we continue to deplete the inventory of homes we have hope for values to increase. Ending on a good note, a good home in good condition, priced right for the market and with proper exposure will sell in any market. 

Please Note: I have used zip code 30071 exclusively for my report of real estate activity in the City of Norcross. Our rule of thumb is that most homes in 30071 are in the City of Norcross. There are other homes in other zip codes that are in the City and some homes in 30071 that may not be in the city. However, I am looking at this data just as any real estate agent, investor or home buyer would see it.

Editor's Note: Nancy Minor is a top-selling agent with Keller Williams. She has been selling in this market for over 20 years.