Metro Atlanta home prices outpaced all but three other Sun Belt cities during the past year, according to a high-profile national survey.
Atlanta’s prices rose 4.2%, behind only Phoenix, Charlotte and Tampa, in the monthly rankings of the Case-Shiller housing index released Tuesday by S&P Dow Jones Indices.
The hierarchy reflects long-term population growth trends, said Craig Lazzara, head of investment strategy at S&P Dow Jones Indices.
Cities in the west like San Francisco and Portland had seen double-digit increases a year or two ago, but their prices have leveled out, Lazzara said. And despite Phoenix, “the Southeast has led all regions since January 2019.”
The Case-Shiller study does not include new construction in the 28counties it surveys, so its calculations differ somewhat from others.
For example, the Atlanta Realtors Association covers 11 core counties. The group said this week that the region’s median sales price in December was up 7.5% from a year earlier.
While none of the nation’s 20 largest metros saw prices drop during the year, Case-Shiller recorded several increases shy of 1%, including Chicago, San Francisco and New York.
Atlanta has historically been one of the nation’s strongest housing markets. Through the 1990s and early 2000s, the region consistently led in homebuilding. And when the housing bubble burst — chilling construction and pushing virtually all prices down — Atlanta’s economy was hurt worse than most regions.
Since the market hit bottom in 2012, Atlanta has come back to the fore – at least for price gains. Home prices are on average 87.7% higher than the trough, according to Case-Shiller. The national home price average has climbed too, but not as robustly, adding 58.6% in value since hitting bottom.
“The main driver in this … is clearly the ongoing and historic lack of for-sale inventory,” he said in an email. “The number of homes available for sale fell consistently through the latter part of 2019 and now sits near the lowest level on record.”
According to the Atlanta Realtors Association, the number of homes listed for sale in the region’s core 11 counties was 8% lower than a year earlier. Those listings represent about 2.5 months of sales.
In a balanced market, listings usually account for at least six months of sales, according to experts.
The greatest scarcity of listings continues to be homes at the lower end of the price range, where first-time buyers cluster, said Craig McClelland, chief operating officer of Better Homes and Gardens Metro Brokers.
The imbalance will likely worsen, because low interest rates will keep drawing would-be buyers into the market, he said.
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