WHY IT MATTERS
Home values mean more than how much you could get for your house. They are a key ingredient of the so-called “wealth effect”: When the value of assets such as homes and stocks rises, people spend more, boosting the broader economy. When values drop, spending dries up. The improving housing market, and rising sales, have been a boost for metro Atlanta’s economy.
Metro Atlanta continues to have among the highest home-price increases in the nation, according to the the S&P Case-Shiller Home Price Index.
City…..Year-over-year increase in February
Las Vegas…..23.1%
San Francisco…..22.7%
San Diego…..19.9%
Los Angeles…..18.2
Atlanta…..16.1%
Miami…..16%
Detroit…..15.5%
20-city composite…..12.9 percent%
Metro Atlanta’s home price recovery continues to outpace the nation’s, even as monthly increases subside from a torrid 2013.
The region’s prices rose 16.1 percent in February from the same month a year earlier, according to the widely watched S&P Case-Shiller Home Price Index, released Tuesday.
By comparison, the index’s 20-city composite rose 12.9 percent.
“Because we’ve fallen so far, we still have a ways to go,” said Todd Emerson, president of the Atlanta Board of Realtors.
Metro Atlanta home prices fell to 1996 levels; they have since returned to 2002 levels.
One factor driving the steady increase has been low inventory, as homeowners chastened by the housing bubble or uncertain about job security stay put.
As home prices continue to rise, real estate pros say they are starting to see more people listing.
Many homes that go on the market don’t last more than “a day or so,” said Bill Adams, president of Adams Realtors. He said he expects spring sales to be lower than they were last year. Still, said Adams, “I’m really pleased with the way the market is going these days.”
The February increase was the 15th straight month of double-digit price growth. The increases, while still high, have been moderating since last April.
Despite the substantial year-over-year increases, the Case-Shiller numbers also show that prices here slipped over the past six months in the report, from September 2013 to February.
The decreases may be in part because investors who bought homes in bulk are easing up on their activity, said David Blitzer, managing director of S&P/Dow Jones Indices. Their purchases may have set a price floor that is being lowered as they buy less.
“I don’t think that’s a concern,” Blitzer said. “It’s bouncing around in a normal sense.”
Emerson said the dip could also be the result of typical seasonal selling patterns.
On a year-to-year basis, big increases likely will continue through 2014, said Eugene James, Atlanta regional director of the housing information company Metrostudy. He said inventory levels — still far lower than normal — “crept up just a teeny bit” in recent months as people are finally starting to get more comfortable listing their homes.
Adams, the president of Adams Realtors, said he scrambled for inventory earlier this year. While he could still use more houses to sell, Adams said the market is slowly returning to normal.
“It’s almost a chicken and egg thing,” he said. “If there’s not the inventory, there’s less people motivated to buy.”
Emerson said he is anxious to see what prices look like in the coming months, as the market starts its normal spring pickup. The Case-Shiller numbers are a trailing indicator, he said, and as such are unable to show what metro Atlanta sales look like now.
“I think there’s great buyer demand, or you wouldn’t have five or six people competing for the same house,” he said.
The addition of more sellers remains key, though, Emerson said: “You can’t sell what you don’t have.”
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