Atlanta home sales trend with U.S.; buyers more cautious

Atlanta has proportionally more expensive homes listed for sale than the national average. Here’s a home looking out onto a lake at the Country Club of Roswell. (Christopher Oquendo

Atlanta has proportionally more expensive homes listed for sale than the national average. Here’s a home looking out onto a lake at the Country Club of Roswell. (Christopher Oquendo

Atlanta’s average home prices are up 5.8 percent since last year, according to a high-profile report on the nation’s housing market issued Tuesday.

Atlanta's price increases slowed slightly at summer's end, leaving the region ranking 10th for yearly increases among the nation's metro areas, according to the S&P CoreLogic Case-Shiller Index.

The deceleration is happening across the country, said David Blitzer, chairman of the company’s index committee. “Price gains are beginning to moderate.”

For the first time in a year, the national average for growth fell below 6 percent, he said. "Ten cities experienced declining prices and other housing data tell a similar story."

Nationally, the largest price hikes over the past year were in Las Vegas, where the average home sale was up 13.6 percent during the past year. San Francisco was second, with an increase of 10.6 percent.

The number of sales has been declining — in Atlanta, as well as nationally — as have new home starts. However, he said, the slowdown is nothing like the burst of the housing bubble in 2006-07, when prices peaked, crashed and kept falling for several years. Most markets – including Atlanta – did not bottom out and start climbing again until 2012.

For months, experts have been blaming the slow sales and rising prices on limited supply of homes listed for sale in Atlanta. That has been especially a problem at the lower price tiers where first-time buyers were intensely competing with each other and pushing up prices.

Higher priced homes make up 62 percent of the Atlanta market, while entry-level homes account for just 14 percent, said Cheryl Young, senior economist at Trulia, a real estate listing site. "This compares to the national numbers where starter inventory is 21 percent and premium is 50 percent of total inventory."

But the problem now seems to be demand, too.

Interest rates risen to seven-year highs, which– combined with higher prices – makes homes more expensive, Young said.

Moreover, wages have not been keeping up, which eventually dampens demand – too many people simply cannot afford a home, she said.

But that, in turn, could slow down price increases to give wages a chance to catch up.

Atlanta’s average home sales price has soared nearly 80 percent since the spring of 2012, although it is only about 8 percent higher than the pre-crash peak of 2007.

In Atlanta, the current market reflects uncertainty, said Torrence Ford, broker and owner of Re/Max Premier in Atlanta. "Rates have gone up and buyers are waiting to see what happens."

But the dip in demand also means that the advantage has largely disappeared for sellers, he said. “Instead of getting an offer in 72 hours, I’m seeing offers in 21 days. To me, that’s more of a normal market, more an even playing field.”

Atlanta home prices

Previous peak: July, 2007

Trough: March, 2012

Source: S&P CoreLogic Case-Shiller Index

Atlanta’s home price changes

Since last year: up 5.8 percent

Since trough: up 79.3 percent

Compared to previous peak: 8.4 percent

Source: S&P CoreLogic Case-Shiller Index

Home prices increases since last year

1. Las Vegas: 13.9 percent

2. San Francisco: 10.6 percent

3. Seattle: 9.6 percent

4. Denver: 7.7 percent

5. Tampa: 7.0 percent

10. ATLANTA: 5.8 percent

Source: S&P CoreLogic Case-Shiller Index