Extending a six-year trend of solid increases, metro Atlanta home prices rose 6.5 percent during the past year, slightly outpacing the national average, according to a high-profile analysis issued Tuesday.
Of the 20 largest metro areas in the nation, the Atlanta region saw the 10th highest increase, stronger than the national average of 6.3 percent, according to a report from S&P CoreLogic Case-Shiller Indices. But the average wage gains for the area last year were less than 2 percent, the government said.
Home prices nationally have been rising for 70 consecutive months, carried largely by an improving economy – a trend with momentum. "With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue," , said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
For several years after the housing bubble burst, barely any new homes were built in metro Atlanta. So as the economy bounced back, hiring picked up and Atlanta renewed its claim on transplanted workers. Demand for homes has swamped the number for sale.
The imbalance was worst at the lower end of the market. There, rising prices in Atlanta housing have increasingly squeezed first-time homebuyers and kept many people renting. The average Atlanta home price has climbed 72 percent since hitting the post-recession bottom in 2012 and are now 4 percent higher than they were at the pre-recession crest in mid-2007.
The result is a market that is great for selling a home, but a potential problem for buyers – especially first-timers or people with marginal incomes.
That squeeze on affordability added to demand in the rental market. Rents in Atlanta in the past year are up faster than all but four other metros.
Yet the cost of a home is still modest compared to the years of the out-of-control housing bubble and they are less frenetic than the national leaders, according to Case-Shiller.
The fastest hike in home prices has come in Seattle where average prices are up 12.7 percent during the past year. Seattle also had the largest growth in jobs, Blitzer said.
The slowest growth came in Washington, D.C., where prices edged up just 2.4 percent.
For first-time buyers, even an apparent bump in the number of new homes being built will not make a big difference, said Svenja Gudell, chief economist for online home listing company Zillow. "Construction activity is at its highest point in a decade. But buyers in the market now shouldn't hold their breath. Even if inventory does begin to recover, it will be rising from incredibly low levels and will likely take years to get back to a more 'normal' level."
The long run: Average home price increase since 2000
Atlanta: 42 percent
Charlotte: 53 percent
Cleveland: 18 percent
Dallas: 82 percent
Los Angeles: 175 percent
New York: 97 percent
Seattle: 138 percent
Source: S&P CoreLogic Case-Shiller Indices
Home price increases: the past year
Atlanta 6.5 percent
Charlotte: 6.4 percent
Cleveland: 4.1 percent
Dallas: 6.4 percent
Los Angeles: 8.3 percent
New York: 6.0
Seattle: 12. 7 percent
Source: S&P CoreLogic Case-Shiller Indices
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