The metro Atlanta housing market broke records in opposite direction last month, hitting a high in the price of homes that were sold and a low in the supply of homes listed for sale.
The median price of a home in the region has now edged above a quarter-million dollars for the first time, reaching $251,250, according to a report from Re/Max of Georgia.
“That’s a milestone for our local housing market,” said John Rainey, company vice president.
That is also more evidence of a rising mismatch between incomes and prices in metro Atlanta with affordability an increasing problem for those at lower end of the scale, including young professionals looking to purchase their first homes.
Wages are rising just a few percent a year, according to both government and private surveys.
The problem for first-time buyers starts with the need for a downpayment on a home, said Brad Dillman, chief economist for Cortland Partners, a large real estate investing company based in Atlanta. “The savings rate has also been low and a lot of potential homeowners are not accumulating what they need to make long-term ownership tenable.”
In contrast, the median price is up 7.4 percent since the same month a year ago – and much of the rise has been among lower-priced homes in more desirable areas which are often snapped up quickly when they come on the market.
Experts generally say that in a healthy, balanced market, the number of homes listed by sellers should represent six or seven months of sales. In that kind of market, buyers and sellers have roughly equal power to bargain.
As the supply falls, the power shifts to sellers, the competition among buyers grows more intense and the prices rise.
Last month, the number of homes listed in metro Atlanta represented just 2.3 months of sales – down from 2.9 months a year ago.
There are some efforts to add modestly-priced homes and still opportunities for buyers.
However, the imbalance between supply and demand at the lower end of the market seems likely to continue so long as the economy is still adding jobs, people are still moving in droves to metro Atlanta and builders are unable to churn out enough new homes to sate demand.
In fact, in most of the desirable areas close to the city, the price of land pressures builders only to build more expensive homes.
The housing market does vary widely, often within the same county.
Fulton County’s prices – which reflect gentrification in the city as well as upper-tier suburban mansions – has led the way. Last month, the median sales price of a home sold in the county was $390,000.