Metro Atlanta home prices jumped 9.9 percent on average during the past year, while the supply of homes for sale crashed to what might be record lows, according to the latest report from the Atlanta Realtors Association.
The median sales price last month was $245,000, up from $223,000 in January of last year, the monthly report said.
Part of what’s driving the increase is the worsening mismatch between supply and demand: growing population, job creation and wage growth has meant an increase in demand that has far outpaced the listings of homes for sale.
The result is a sellers’ market, with potential buyers often bidding against each other for homes in desirable areas. They are typically sold quickly – sometimes for more than the asking price.
“New listings generally aren’t keeping up,” said Bill Murray, president of the realtors’ group.
According to Zillow, nearly 20 percent of all homes sold last year went for more than the asking price.
Experts say that in a healthy, balanced market, the number of homes listed for sale generally represent six or seven months of sales. The market has been well short of that number for several years and the supply has kept shrinking.
Last month, the listings represented just 2.2 months of sale, Murray said.
While January meant a lot more homes listed than in December, the number was down 12.7 percent from a year earlier.
And with fewer homes on the market, even solid demand does not result in more homes sold: There were 3,013 residential sales in January, a 4 percent decrease from the same month a year earlier, the report said.
The group’s report includes data from the 11 central counties of metro Atlanta and is compiled by the First Multiple Listing Service.
In the four core counties, the median sales price was highest in Fulton: $305,000. However, the most sales were recorded in Gwinnett, where 648 homes were sold, according to the realtors report.
The national rate of home ownership has continued to increase, and the rise in interest rates will not dramatically chill the demand for homes, according to a report by Redfin. Just 6 percent of buyers would change their minds if rates keep rising, Redfin found.
Demand for housing in Atlanta continues to rise, since the region remains a fairly popular destination of relocating Americans. According to Zillow, people who are 35 years old or younger make up the bulk of new buyers.
However, with so many of the new residents young professionals – frequently without children – Atlanta has increasingly become a rental market. Metro Atlanta last year was one of the top 10 regions for construction of apartments, according to RealPage.