Stone Mountain home prices are attracting a new crop of buyers

Although headlines over the past few years have depicted the real estate market across the country to be fickle and uncertain, the local market has been more promising for some.

Home prices in Stone Mountain have been steadily dropping since 2008, making the city a hotspot for first-time homebuyers, which has contributed to the 8 percent increase in the local population.

“I have been selling homes in the Stone Mountain area since 1980, so I have seen it change several times," said Better Homes and Gardens Real Estate Metro Brokers realtor Lynn Gay. "Real estate has a tendency to ebb and flow. It goes through these cycles of tremendous growth and then it contracts a little bit where money tightens up and so does the availability of properties."

"The last cycle has been one where the prices have come back down a good bit and so have the interest rates, so I’m seeing a lot of first-time homebuyers now that couldn’t afford to buy, say five years ago, that can really afford it now," she said.

As a result, you’re probably eyeing more new faces around your block.

And Nakia Phelps may just be one of them.

About eight years ago, Phelps moved from her mom’s Stone Mountain home to rent a Dunwoody apartment. But, in 2009, when the market became even more  attractive for first-time homebuyers, the 30-year-old and her husband, Marc, decided to move back to the area where she grew up, which is close to Redan Road.

“The foreclosure market was the cheapest in that part of Stone Mountain. We were looking for a house in a certain price range as we wanted to pay cash and not have a mortgage. So, price played a huge role! We were looking to stay within a certain amount leaving at least $15,000 for repairs and upgrades,” Phelps said.

And Phelps isn't alone. As a matter of fact, neighborhoods lining Elam, South Hairston and Redan Roads have been the most popular among Stone Mountain's busiest areas with at least 200 homes sold each quarter since the end of 2008, most of which have sold for about $80,000. On the other hand, homes near Pine Lake and Stone Mountain Park, where the median price for many homes is around $140,000, have just seen a little over 100 homes sold each quarter during the same time period, according to city-data.com.  

Today, all across the city, the median sale price for most homes has gone down by 8.6 percent, or by $8,214, when compared to 2010 prices, according to real estate website trulia.com. Similarly, the average price per square foot for most homes has decreased by 3.8 percent when also compared to last year’s prices.

Even when up against neighboring cities, Stone Mountain has had the greatest number of homes to significantly drop in sale price, according to city-data.com.

For example, rewind to the years 2005 through 2007 before the housing market took a hit, and you'll find that local homes were selling for about $200,000 in some areas. Snellville, however, has experienced its home prices decrease from $180,000, on average, to $140,000. From city-data.com findings, Lithonia has seen a similar dip in sale prices from about $140,000 to a current $100,000.

While first-time homebuyers are finding unparalleled success when it comes to finding a home in Stone Mountain, sellers aren’t quite as lucky these days.

“It is a tougher market for those looking to sell right now. The competition for sellers is  bank-owned foreclosed properties. A homeowner that wants to move up has to compete with foreclosed properties, and banks have taken the opinion that the longer they hold a home the more likely it is to fall under a state of disrepair. Banks are pricing these homes more aggressively so they don’t hold them for any more than 30 to 60 days. It is hard for a regular seller to compete with that because the seller is going to try to make a little bit of a profit,” Gay said.

With all of these factors into play, Gay has found that when sellers hand over the keys to the new owners, they typically have not gained as much cash from the deal as they had hoped.

“Don’t worry about making a huge profit. You should worry about the end result," Gay said.

"There are some great move-up homes that a year ago were in the $300s but are now in the $250s price range. If you can sell your current home and pay off the mortgage and that allows you to buy the home of your dreams at an affordable interest rate and price point then the time to do that is now!”

If all else fails, there is a silver lining to this market for sellers.

“We have already been through about 2 ½ to about 3 years of this buyers’ market, but since the market moves in a five-to-seven-year cycle, I say we are halfway through it at the very least,” Gay said.

“The next phase is when the rates go back up there will be a new flood of people that want to scoop up these properties that were financed at a low interest rate,” she said.