WHY IT MATTERS
Home values are important even to people who aren’t likely to sell or buy anytime soon. They contribute to the so-called “wealth effect” that helps drive the broader economy by making people more confident about purchases of all types.
The double-digit increase in metro Atlanta home prices continued for the 12th consecutive month.
Prices in November rose 18.5 percent from the same month a year earlier, according to the S&P Case-Shiller Home Price Index, released Tuesday.
The increase in prices has moderated since the spring, when metro Atlanta logged a 20.8 percent year-over-year jump for April.
“Prices are going up in a steep fashion,” said Kelly Walsh, a Realtor with Adams Realtors. “Certainly, where there are great schools and low inventory, it can be a real dogfight to get a good house that’s affordable.”
According to the index, metro Atlanta homes are now selling at 2002 levels. They fell to 1996 levels during the worst of the recession.
But for the third straight month, while prices rose compared to a year earlier they fell slightly from the previous month.
The difference from October to November is statistically insignificant, said Eugene James, Atlanta regional director of the housing information company Metrostudy. The decreases indicate typical seasonal buying patterns, he said.
“The sky is not falling,” he said. “Long story short, prices are going up.”
Low inventory has been one reason for the price rise of recent months, with many potential sellers still on the sidelines. That has forced buyers to expand their searches.
“A lot of agents on my team are really having trouble finding houses,” said James Marks, Atlanta managing broker for Redfin. “The ugly, overlooked houses — even those are getting snapped up.”
Low inventory, Walsh said, leads to quicker sales. In November, houses in metro Atlanta were on the market for 40 days at the median, Marks said, compared with 90 in a normal market. During the recession, most stayed on the market for more than 100.
Twenty-one percent of all metro Atlanta listings are under contract within two weeks, Marks said.
As they watch prices rise, metro Atlanta home shoppers are increasingly willing to forget about their dream home.
“For whatever reason, houses that have been on the market a long time, even without a price adjustment, are selling,” said Erin Fye, a Realtor with Coldwell Banker. “People do have to make compromises along the way.”
New homes are coming on to the market in a trickle, but Marks said most people are still not quite ready to list their homes. James, with Metrostudy, said demand is still outpacing supply, but he hopes to see more houses on the market in the coming months. New construction, though it has increased, is not making up for the gap.
“I’m really hoping we have a spring push, like back in the old days,” Fye said.
Fye said her buyers are being more cautious, looking at houses again and again before they make decisions. In part, that’s because they want their “forever homes”— some sold houses for a loss, and others just remember the worst of the recession.
“They’re not buying on emotion anymore,” she said.
Metro Atlanta’s year-over-year increase is the fifth-highest among 20 cities in the S&P index, and higher than the overall increase of 13.7 percent. James expects prices to continue their double-digit increases through most of the year, as Atlanta makes up for lost ground.
“Eventually, we have to slow down,” he said. “No area can continue to support 18 to 20 percent increases year-over-year into infinity.”
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Credit: Miguel Martinez