Metro Atlanta home prices regained some steam in November after a bit of a swoon earlier in the fall, with prices growing at a faster rate locally on both a monthly and annual basis than those nationwide.
Values of existing homes in metro Atlanta rose 4.9 percent over the prior 12 months, compared to 4.3 percent in the benchmark 20-city list used in the closely-watched S&P/Case-Shiller Home Price Indices.
Metro Atlanta was also one of only nine cities in the 20-city list that reported monthly price improvement.
Home values in the metro area are now on par with those seen in February 2004, the data show. The Case-Shiller report tracks values of existing homes.
San Francisco (8.9 percent), Miami (8.6 percent), Las Vegas (7.7 percent) and Dallas (7.7 percent) showed the strongest annual gains.
The home market in metro Atlanta and nationwide took a beating during the recession. Atlanta reached peak prices in July 2007 during the height of the market’s over-exuberance, but then values crashed when the financial crisis hit, along with a glut of foreclosures.
Prices bottomed out in metro Atlanta in March 2012 at levels not seen since the mid-1990s.
Alex Carrick, chief economist with construction data firm CMD Group, said the current national rate of home price increases is more sustainable than during the bubble that preceeded the bust.
“I don’t think there’s any question that the housing market … will be gradually improving over the next year,” he said. The drop in gas prices is good for consumer sentiment and will be positive for homebuilding and buying. Job growth is fairly strong.
As the economy continues to gain ground, Carrick said “more people will feel confident about taking on a mortgage.”
Atlanta’s economy has lagged the recovery in oil-rich markets such as Dallas and high-tech hubs like San Francisco. But with energy prices tumbling and Atlanta’s tech sector seeing growth, it could prime the metro area’s home market for a sustained rebound, Carrick said.
Housing is a substantial part of the U.S. economy and a driver of consumer spending.
As values rise both locally and nationally, homeowners who were previously underwater — owing more than their homes are worth — are beginning to regain equity and the flexibility to sell their homes and trade up or move to other areas in search of work.
The housing market in metro Atlanta and nationally is still vexed by limited supply and strict mortgage standards that make it difficult for buyers to qualify, experts say. Many buyers also do not have the money needed for a down-payment and some still have credit histories bruised from the fallout of the recession.
Younger adults, who may have had careers delayed or have steep student loan debts, have shown a preference for renting over buying.
“The best hope for housing is the rest of the economy where the news is better,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. “2014 was a good year for job creation and weekly unemployment claims — good short term indicators — which continue to provide upbeat reports. Consumer confidence, helped by cheap gasoline prices, is strong, and a good GDP number is expected this week.”
A report Monday by investment analysis firm Morningstar showed some reasons for cautious optimism about future home sales, though it said the recovery likely will remain slow and prolonged. The report said a tightening labor market should result in rising wages. Meanwhile the dramatic increases in pricing in some areas seen since the recession should moderate.
The continued spike in rental prices could ultimately push more able borrowers into the home buying market, the report said.
Also Thursday, the U.S. Commerce Department reported that sales of newly built homes surged in December, climbing 11.6 percent on a seasonally adjusted basis, the Associated Press reported. That could point to a strong new home sales market in 2015 after a fairly flat 2014.
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