2007 was an interesting year for real estate sales in Coweta County, Georgia. Many factors have contributed to the decline. In simplest terms, the supply of real estate for sale far exceeds the demand. However, many factors have contributed to the decrease in demand for property, many of which have been overlooked. Here are some reasons why the market has declined in Coweta County:
1) Price. Hurricane Katrina place a tremendous demand on the supply of building materials, and costs skyrocketed. Much of the three to five year upgrade market was eliminated, Why would anyone pay more for a smaller house with less features than the one that they currently own?
2) Over development and density. When the market was hot, density was the buzzword that all land purchasers were preaching. Every piece was raw land was engineered to deliver the maximum number of lots at the lowest cost. As the buyers became more savvy, they realized that the lot was an important part of their purchase, and they began to become more selective about the size, location, and usability of their lot.
3) Government impact fees. Government impact fees goes right to the bottom line of the price of a home. Although charged to the seller, ultimately the cost is passed on to the purchaser, essentially creating a "purchase tax" that did not exist some years ago.
4) Competition with foreclosed properties. The number of foreclosures has skyrocketed, creating a tremendous supply of below market alternatives for the dwindling number of purchasers. Builders are being forced to offer costly incentives to move their properties, leaving no cash profit, and no ability to continue to pay their debt services. Before long, their properties are repossessed and offer for sale as foreclosed properties.
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