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Atlanta home prices outpace all but three other Sun Belt metros

The price of homes in Atlanta has continued to rise, with lower-priced, “entry-level” homes increasing at the fastest pace. AJC file photo
The price of homes in Atlanta has continued to rise, with lower-priced, “entry-level” homes increasing at the fastest pace. AJC file photo

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.

A week ago, Re/Max said the median price of an Atlanta home sold during the month was up 6.7% for the year. That report, like Case-Shiller, includes 28 counties.

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.

Now, as the market enters what is traditionally its busiest season, housing seems poised for solid price gains, said economist Matthew Speakman at real estate database company Zillow.

“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.

Atlanta home prices

Pre-recession peak: August 2007

Post-recession trough: May, 2012

Prices since trough: up 87.7%

Prices since previous peak: up 13.5%

Sources: Case-Shiller survey from S&P Dow Jones Indices and CoreLogic

One year metro home price increase

Phoenix: 5.9%

Charlotte: 5.2%

Tampa: 5.0%

Atlanta 4.2%

Cleveland: 4.0%

San Diego: 3.9%

Twenty largest metros: 2.6%

National average: 3.5%

Sources: Case-Shiller survey from S&P Dow Jones Indices and CoreLogic

Note: does not include prices of new construction

Median sales price, December

Cobb: $303,000

DeKalb: $295,000

Fulton: $370,000

Gwinnett: $261,000

Region-wide $285,000

Atlanta Realtors Association