Home prices in the Atlanta region have continued to rise faster than in most other metro areas, according to a much-watched national report issued Tuesday.
In the past year, local prices have jumped 4.2%, nearly twice as much as the average of the 20 largest metro areas, according to the S&P CoreLogic Case-Shiller Index. Atlanta's price gain was the fourth-largest increase, behind only Phoenix, Tampa and Charlotte.
Overall price increases are not as large as they were a few months ago, but there is reason to expect the price hikes to continue or even grow in 2020, said economist Matthew Speakman of Zillow, a Seattle-based source of real estate data, primarily for consumers.
A strong job market and low interest rates have combined to boost home buying, he said. "Despite recent upticks, mortgage rates remain nearly a full percentage point below where they were this time last year."
Demographics might fuel demand too. Millennials are more likely than previous generations to be renters, but now they are aging into careers and families. A shift to home buying could give the market a jolt.
But the catch – especially in Atlanta – is a shallow pool of homes for sale in price ranges appealing to first-time buyers. That shortage gives sellers an advantage in negotiations, which generally means rising prices.
“That extreme shortage of for-sale listings, particularly at lower price points, remains a concern,” Speakman said.
Since the housing market bottomed in 2012, metro Atlanta home prices have risen 81.5%, according to Case-Shiller. That index differs somewhat from other measures, since it tracks only resales and does not include data on new home construction.
Those resales counted by Case-Shiller account for the vast majority of home sales, especially in metro Atlanta, where new construction still represents less than half of pre-recession levels.
Atlanta’s current prices are 13.7% higher than the pre-recession peak of 2007, according to Case-Shiller.
Of course, what is a problem for some is a plus for others, said Bill Banfield, executive vice president of Quicken Loans.
“The silver lining to this month’s increase in home price is homebuyers will see continued appreciating value in their home after the transaction,” he said.
Past year's price hike for home*
Phoenix: 5.8%
Tampa: 4.9%
Charlotte: 4.8%
Atlanta: 4.2%
Minneapolis: 4.2%
Top 20 metros: 2.2%
*Calculation does not include new homes
Source: S&P CoreLogic Case-Shiller Index
Metro Atlanta home prices
Since bottom of market in 2012: up 81.5%
Compared to previous peak in 2007: up 13.7%
Source: S&P CoreLogic Case-Shiller Index
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