EAST ATLANTA - A year ago, you almost couldn’t give away a house in Atlanta. Prices bottomed out at a fraction of what they’d been only a couple of years before. But now, the market has changed dramatically – and it’s buyers who are having a tough time.
“I like it,” said first-time homebuyer Jolene Zupnik as she toured the 1950s brick ranch in East Atlanta.
“Cool!” said her boyfriend, Steve Gesset, standing next to her in a thoroughly modern, made over kitchen. “I like it too.”
So this couple decides to put an offer down on three-bedroom, two-bath house in DeKalb County. Their realtor, Michael Bunch, warned them to hurry with the offer because this is now a seller’s market and the best strategy is to be first with an offer in order to fend off competition.
“Sellers are even having to bring cash to closing,” Bunch said, in stark contrast to the buyer’s market of just a year ago. Then, he said, sellers were forced to bring cash to close because they simply didn’t have enough equity to get what they owed in financing out of the sale.
But in what’s proven to be a real estate environment that few could have predicted then, sellers are now out in force. Few homes are being built and, in the wake of the real estate meltdown that began in 2007, prices are not keeping up with demand.
“If you’re in a high-demand area, there are bidding wars going on,” explained Paul Baker at Sterling Risk Advisors. Appraisers are still basing financing decisions on property values that have decline more than 40-percent in some cases since metro area real estate hit a high-water mark in 2006. Unable to outbid other buyers, Zupnek and Gesset are forced to compete in an environment where cash is king.
Baker puts an even sharper point on it.
“You have to pay cash,” he said. “Sellers used to have to come to the table with up to $40,000 in cash just to get out from under the property. But now, it’s buyers who have to bring that much to the table to win the house they really want.”
In the end, Zupnik and Gesset lose this unique house near Briarcliff and LaVista, but not because they couldn’t afford it or bid too low. Someone else offered the same price with a heftier payment.
“It’s frustrating,” said Bunch. “I hate to lose.”