REBOUNDING
Top 5 cities for home price gains, April 2013 vs. April 2012
San Francisco, up 23.9%
Las Vegas, up 22.3%
Phoenix, up 21.5%
Atlanta, up 20.8%
Detroit, up 19.8%
Source: S&P/Case-Shiller Home Price Indices, April 2013
Metro Atlanta housing prices, which have been rising out of a deep hole for the past year, climbed even faster in April.
Nationally, there are questions as to whether double-digit home price increases are sustainable. Locally, real estate experts say prices can keep rising for months without worries about a new housing bubble.
At the nadir last March, metro Atlanta prices fell to levels not seen here since 1996. The latest S&P/Case-Shiller Home Price index shows local prices have returned to 2000 levels.
With a 20.8 percent year-over-year increase in April — the largest ever for the region in the Case-Shiller report — metro Atlanta prices are growing more quickly than in much of the nation.
The 20-city Case-Shiller composite rose 12.1 percent year-over-year and 2.5 percent in April, from March. Home prices here rose 3.8 percent in April from March.
Atlanta was hit harder than many metro regions by the housing bust and the wave of foreclosures that followed. For that reason, experts say this year's string of increases, though rapid, is not a cause for concern. Atlanta has had near-double-digit growth since December, when prices rose 9.9 percent over the prior year.
“These numbers reflect a continued pent-up demand for homes in the Atlanta area,” said Nancy See, president of the Atlanta Board of Realtors. “We’ve fallen so far. …I think it’s appropriate, given where we’ve been.”
If prices rise too much, and too rapidly, it could be a concern in the long term, said Walter Molony, spokesman for the National Association of Realtors. Lawrence Yun, the group’s chief economist, has said the increases are unsustainable if wages do not keep up.
Home builders need to increase their inventory, Molony said, to help with supply. He thinks the market can support strong gains for at least a year.
“Prices over-corrected on the downside,” Molony said. “It’s still a tremendous bargain.”
See expects rising interest rates to push more buyers into the market, causing prices to continue rising for the next several months, if not years. The number of homes for sale remains low, and buyers looking in desirable areas are often involved bidding wars. Sellers in such areas are receiving multiple offers and going under contract in days, if not hours.
After weeks of looking, Ellen Sauve and her husband finally found a house on Father’s Day. They saw the listing that morning, and made an offer in the afternoon. By 5 p.m., the sellers had accepted it.
“I definitely think if we’d waited a little longer, we might have had to spend an extra ten grand,” Sauve said. “It’s exhausting. You get your hopes up, you see this beautiful home, but you can’t even get in to see it before it’s under contract.”
At first, the rapidly changing market surprised the East Cobb couple. They had already lived in their home four years longer than they meant to when they decided to sell it. Sauve put it on the market in February and waited 60 days for an offer. It finally came — a little lower than her asking price.
But Sauve soon found that before she could get back in the market, it had quickly gone from a buyer’s market to a seller’s. And when she made offers on a new home, she was often too low and too late.
“Everything’s going up,” she said.
Fewer foreclosures are part of the reason prices have risen here, said David Blitzer, managing director of S&P/Dow Jones Indices. Prices also hit bottom later than many other cities.
Blitzer expects the pace of the increases to slow after July, but he does not think prices will dip at all. They last fell slightly in October, before rising again.
“I don’t think it’s going up too much, too quickly,” Blitzer said. “I think it’s OK.”
