Homes sold
Sales in metro Atlanta dropped from the year before in nine of the past 10 months. May figures are preliminary.
Month…..Total sales…..Year-over-year percent change
June…..4,351…..7.0
July…..4,623…..9.5
August…..4,268…..-1.2
September…..3,594…..-0.9
October…..3,613…..-5.3
November…..3,103…..-9.0
December…..3,429…..2.9
January…..2,561…..-4.6
February…..2,708…..-6.6
March…..3,393…..-8.9
April…..3,875…..-1.4
May…..4,317…..-9.6
Source: Atlanta Board of Realtors
Sale prices
The median sale price of metro Atlanta homes is up substantially from 2013, and continues to rise
Month…..Median price…..Year-over-year percent increase
June…..$215,000…..6.3
July…..$217,000…..47.1
August…..$205,675…..38.5
September…..$189,000…..35.0
October…..$189,704…..5.5
November…..$181,000…..20.7
December…..$196,000…..21.0
January…..$180,000…..22.4
February…..$187,000…..16.9
March…..$208,000…..16.9
April…..$210,000…..11.1
May…..$226,000…..13.6
Source: Atlanta Board of Realtors
WHY IT MATTERS
Home sales and values are important even to people who aren’t likely to sell or buy anytime soon. The state of the housing market contributes to the so-called “wealth effect” that helps drive the broader economy by making people more confident about purchases of all types.
Metro Atlanta home sales fell again in May, as would-be sellers continued to stay out of the market.
With too few homes for sales, prices are rising and sales are coming fast.
“The good houses are going very quickly,” said James Williamson, vice president of production at Shelter Mortgage in Norcross. “It’s extremely competitive.”
The paucity of for-sale homes led May sales to drop 9.6 percent from the year before in the 11-county region, according to the Atlanta Board of Realtors, even as median prices rose 13.6 percent. Year-over-year sales have been down in nine of the last 10 months, while prices have consistently risen.
The reasons for continued low inventory are varied. Plenty of people still owe more on their homes than they are worth, which is also known as being underwater. Without equity in their homes, there is little incentive for them to put their houses on the market unless they need to move.
Some potential sellers feel like they were hurt by the market’s last boom and bust, said Zac Pasmanick, a Realtor with Re/Max Metro Atlanta. Instead of jumping back in to the buy-sell paradigm, they are renovating and staying in their homes
“They’re content with what they have,” he said. “Sellers that don’t have to move aren’t moving.”
And some homeowners, who refinanced when interest rates were at their lowest, don’t have an incentive to pay a higher cost for new loans, said John Makarewicz, director of operations for The Mark Spain Team.
“The numbers are just not compelling enough to get them to make the move,” he said. “We hear it from some of our potential sellers.”
That phenomenon — known as the lock-in effect — will only intensify as interest rates rise. Homeowners who locked in a sub-4 percent rate through refinancing or by the timing of their purchase may be loathe to pay more in interest for their next home, said Eugene James, Atlanta regional director of the housing information company Metrostudy.
As a rule of thumb, each point increase in interest rates amounts to a $60 a month increase for every $50,000 of house, Silverton Mortgage president and CEO Josh Moffitt said.
Moffitt said the lock-in problem is minor now, but will be more evident if rates rise quickly.
He thinks other factors are more prominent in holding down the number of sellers. The need to buy a home quickly after a sale may be daunting, he said, and some may erroneously believe they need a larger down payment than they can afford.
Both he and Makarewicz said many buyers in desirable areas are getting outbid four and five times before they succeed in buying a house. Still, inventory is slowly rising. By next year, Makarewicz said, supply and demand should be even.
“I really think we’re seeing a hiccup,” he said. “I feel like we still have a great market, a great opportunity. It’s not like we’re having trouble selling.”
Todd Emerson, president of the Atlanta Board of Realtors, said the market is getting closer to equilibrium. Rising prices are good for the region, he said. They bring more people out from underwater, giving them equity in their homes. And there are no longer problems with appraisals that don’t meet offer prices, scuttling deals.
Emerson said new-home sales, which are not included in the tally, are up. And while inventory is still low, it has been inching higher as more people test the market. Sales in May are higher than they were in April, according to the Atlanta Board of Realtors.
“Maybe a lot of people still don’t realize the housing market truly has changed for the better,” said James, of Metrostudy. “A lot of folks, perhaps, feel if they continue to wait, they’ll be able to sell their house for even more.”
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