Growth in home prices has been fueled by a smaller than normal number of houses for sale. (Jenni Girtman / Atlanta Event Photography)

Metro Atlanta home price growth cools a bit

Metro Atlanta home price growth has slowed a bit, according to a much-watched national survey.

The average price for the region rose 5.3 percent in the 12 months through June, compared to the national average of 5.8 percent, according to the S&P/Case-Shiller House Price Index released Tuesday.

Atlanta ranked 15th among the 20 largest metro areas for price hikes.

The main driver remains a long-running shortage of homes for sale and an expanding economy, which means modestly priced homes sell quickly, said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, which produces the report.

“Both the number of homes for sale and the number of days a house is on the market have declined for four to five years,” he said.

Nationally, the number of homes for sale represents 4.2 months of sales, and Atlanta’s supply is lower than that. Listings typically represent six or seven months of sales in a healthy, balanced market.

The scarcity is also at the middle and lower end of the market, not at the top where many high-priced homes sit on the market. That means price hikes disproportionately affect first-time buyers and other would-be purchasers with modest incomes.

Those buyers are getting support from job growth, but price hikes have outpaced wage growth.

Despite roughly five years of improvement, the average price of homes in the 20 largest metros is still slightly below the peak of 11 years ago, just before the housing bust.

Atlanta’s average has climbed 68 percent since 2012 and is now 1.8 percent above the peak. But the improvement has been uneven. Many areas on the north side of the city have seen prices rise robustly, while some areas – especially on the south side of the city and suburbs – have lagged.

Some reports show up to 30 percent of metro Atlanta owners are still under water on their mortgages. Most are on the south side of the city, said Bruce Ailion,  a realtor with Re/Max Town and Country in Woodstock.

“Lumping a nearly 6 million population together for one number is misleading,” he said. “Values in some areas are up substantially, while others they are flat. On average, I am very happy with 5 percent growth.

What is true for metro Atlanta, is true for the United States overall.

“Nationwide, less than half of all individual homes are worth more today than they were prior to the recession,” said Svenja Gudell, chief economist for Zillow.

Less than 1 percent of all the homes in Las Vegas are worth more than they used to be at the peak, she said. “As the market overall continues to heal, it’s critical to remember that the scars of the recession remain all-too real and raw for millions of U.S. homeowners.”

During the past year, all the top metros have seen increases, according to Case-Shiller. Fastest-rising during the year were prices in Seattle: increasing at a 13.4 percent clip, followed by Portland, up 8.2 percent and Dallas, up 7.7 percent.

“It’s a new normal in the housing market,” said Cheryl Young, chief economist at San Francisco-based Trulia. “Ever-rising prices being met by insatiable demand.”

But the pace of change has slowed in Atlanta as the market moved from the high-intensity of the late spring toward the fall. In fact, when adjusted for seasonal patterns, Atlanta’s average price dipped by 0.2 percent in June.

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