Metro Atlanta home prices improved in July for the fourth straight month – an encouraging sign for the local economy, a report released Tuesday indicated. But not all the news was good.
While the month-to-month price improvement — helped by factors such as slowing foreclosures and a 12-year-low of available homes for sale — is reassuring, Atlanta’s housing market remains one of the hardest hit in the nation.
The region rode a housing bubble to stratospheric price gains during last decade’s boom.
But, despite the improvement of the last four months, prices this July were down 9.9 percent compared to a year ago, and Atlanta home prices remain below their January 2000 levels, according to the closely-watched Standard & Poor’s Case-Shiller Price Index report. Hard hit markets like Las Vegas and Detroit also remain below their respective January 2000 levels.
Metro Atlanta’s 2.6 percent improvement from June to July was better than the average increases of other major U.S. cities.
Mitch Kaminer, president of the Atlanta Board of Realtors and the head of Re/Max Paramount Properties in Roswell, said core metro neighborhoods in desirable school districts are rebounding at a faster rate than the Case-Shiller report suggests.
Atlanta Board of Realtors data showed sale prices were up 7.9 percent in July over the same month last year in the 11 counties it tracks. Sales were up 3.2 percent. Case-Shiller covers 23 counties and is an index charting values versus a baseline of January 2000.
“The prices are not what they were, and they’re not going to be for a while,” Kaminer said. “It’s baby steps. It was a huge correction and it’s going to take some time to come back.”
Nationally, Case-Shiller reported a 1.5 percent increase in its 10-city composite and a 1.6 percent gain in its 20-city report. Year-over-year gains were 0.6 percent and 1.2 percent, respectively.
Housing growth has helped lead the nation out of virtually every recession since World War II, and homes are typically the largest component of an average family’s wealth. But the rebound from the Great Recession has occurred in frustrating fits and starts, with home values a considerable anchor.
Metro Atlanta’s 9.3 percent unemployment rate remains above the national average.
Still, stability in housing is a boon to the economy.
Higher prices help “by nudging fence sitters” into buying, economists for IHS Global Insight said in a report Tuesday. Also, higher prices help boost new construction, which was a key cog in metro Atlanta’s pre-recession economy.
In addition to the monthly price improvements, the paces of foreclosures and delinquent loans — key drivers of price declines — have waned.
The metro Atlanta foreclosure rate fell in July to 2.11 percent from 2.71 percent a year ago, according to CoreLogic, a research firm. Last month, Georgia had the sixth highest rate of foreclosure filings in the nation, according to RealtyTrac.
Real estate experts say contracting supply of resale homes and an uptick in new home construction — which tends to raise all property values like boats in a tide— contributed to the monthly price gains.
Metro Atlanta had 22,044 homes for sale in September, down a third since September 2011 and the lowest number in 12 years, according to data from Cobb County-based real estate firm SmartNumbers.
Building permits for single family home construction in metro Atlanta, though just a fraction of 2007 levels, are up 28.6 percent through July, compared to the first seven months of last year, according to research firm Metrostudy.
Builders like Warren Jolly, who weathered the fall, are now starting to see prices and demand climb in strong school districts, such as Buckhead, East Cobb and Sandy Springs.
Jolly, president of The Providence Group, said his firm is getting multiple offers on new houses, reaping sales contracts in days instead of weeks in historically hot areas.
“We haven’t seen this in six years,” Jolly said.
The skimpy inventory of resale homes on the market is pushing able buyers to new construction, which in a healthy market sells at a 10 percent to 20 percent premium to resale homes, Jolly said.
“We’re seeing some urgency among buyers that we’ve not seen in a long time,” he said, though financing is still a hurdle for many buyers.
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