A drop in the number of lower-cost homes available in metro Atlanta could push builders to focus more on the market for first-time buyers next year, though a much-watched national report predicted Tuesday that area prices will continue to rise.
Atlanta has a reputation as being affordable, and its prices aren't increasing as quickly as many other regions, according to the S&P CoreLogic Case-Shiller Indices.
All 20 of the largest metros saw prices increase during the past year — 13 of them faster than Atlanta.
The average price of a home in metro Atlanta has risen 5.4 percent from a year ago, compared to a 6.2 percent rise nationally, the Case-Shiller report said.
With unemployment low and inflation anemic, "most economic indicators suggest that home prices can see further gains," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, which issues the report.
Still, the slower pace of increases is faster than the growth in many households’ income, he said. “The one dark cloud for housing is affordability — rising prices mean that some people will be squeezed out of the market.”
The market overall is unbalanced, said Svenja Gudell, chief economist at Zillow.
There’s a reason that, in places like metro Atlanta, most price increases are in the lower ranges of the market where first-time buyers are likely to look, she said. “Demand is coming first and foremost from buyers in the entry-level and mid-market segments, but available inventory is largely concentrated at the high end.”
More than half of the homes for sale in the United States are in the top one-third of prices — out of reach for first-time buyers, Gudell said.
Seattle had the fastest price growth: 12.9 percent. Weakest growth was Washington, D.C., up just 3.1 percent. In the South, the fastest price growth was in Tampa, with an increase of 7.2 percent.
The median home value in metro Atlanta is $182,200, according to Zillow.
Nationally, the median value is $203,700.
CoreLogic says that the homes in more than one-third of American cities are overvalued – that is, priced higher than they should be based on economic fundamentals. But Atlanta is not one of them, a CoreLogic spokeswoman said Tuesday.
Past year’s median home price increase for Southern metros:
Tampa, 7.2 percent
Dallas, 7.1 percent
Charlotte, 6.2
National average, 6.2 percent
Atlanta, 5.4 percent
Miami, 5 percent
Source: S&P CoreLogic Case-Shiller Indices
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