THE BIG PICTURE

By Denise Pajak PrivatePLUS Mortgage

While economic forecasts and yearend reviews spout ratios, percentages, numbers and analyses of what happened in 2014 and what’s in store for 2015, what really matters to a homebuyer is the big picture. Is 2015 the year to sell or buy a home? Let’s look at some trends that may impact your decision.

Neighborhood Revitalization

After seeing a drastic jump in in the summer of 2013, home prices for Intown Atlanta continued to rise in 2014. Many homeowners who were underwater started to see their equity return, and with that, the opportunity to sell for a profit. Home prices for Intown are projected to continue to rise, and with money in their pocket, buyers are perched to make the move.

Investor rehabs and new construction in desirable neighborhoods and around the Beltline should continue to be strong into 2015. By renovating the outreaches of hip neighborhoods such as Old

Fourth Ward and Grant Park, homes are becoming available that offer a more affordable way to live the Intown lifestyle.

Lenders were more willing to extend construction loans, so many homeowners purchased fixer-uppers and created their dream home, often resulting in instant equity. For 2015, renovating will continue to be an impetus for increasing home values.

Rob Smith, Realtor with Keller Williams Realty says that now is the time to buy fixer-uppers. But he cautions people to talk to two different people before they begin.

“Talk to a Realtor about the future value of the renovated house so you don’t make decisions in a vacuum,” Smith advises, because the features that will bring value are sometimes neighborhood specific. “What people want in Brookhaven is different from what people want in Grant Park, so talk to a designer to design the home to appeal to that market and stand the test of time based on your Realtor’s feedback.”

Buy or Hold

When considering whether to stay and let your home appreciate or to sell, focus on the second step – the purchase. Most people upsize, so a three to five percent increase in the price of the more expensive new home will exceed the increase in profit you may get on your old home. Therefore, selling now makes sense. Furthermore, with the surge in renovations, the homes that demand the highest price are usually upgraded.

Rob Smith warns “If you’ve been in your house for 25 years and haven’t upgraded it, your home stays constant in price compared to your renovated neighbors.” So even if you are downsizing, your new place will most likely increase in value, while your old home is slower to appreciate,” Smith says. With time, your major systems age and your granite countertops looked dated. What was hot eight years ago is so “eight years ago.”

More Competition and Bidding Wars

Fannie Mae is helping create more buyers by expanding lending guidelines to encourage home buying, especially among first timers. The three percent down payment program is back, rivaling the FHA loan. A plethora of low down payment programs, even on jumbo loans, is attracting young families to buy large homes in highly sought after school districts. Bidding wars are common and having a pre-approval letter is key. More competition and Atlanta’s growth is sure to make 2015 an exciting year in real estate.

Denise Pajak is vice president and a mortgage banker at PrivatePLUS Mortgage, a division of Private Bank of Decatur and Buckhead.