Metro Atlanta home prices leveling off


WHY IT MATTERS

Even for people who aren’t buying or selling, home values are important. Rising values contribute to the so-called wealth effect, which economists say spurs broader spending and economic activity. In addition, more sales and new home construction can fuel related industries ranging from banking to home improvement and furniture stores.

Metro Atlanta home price growth slowed in September, according to a national housing report released Tuesday, and that’s not necessarily bad news.

The metro region now mimics more closely the national scene after years as one of the nation’s housing outliers — for all the wrong reasons.

Take home sale prices, for example. Nationally, prices declined a composite .1 percent in September from the previous month, according to the S&P/Case-Shiller Home Price Index. In Atlanta, they dropped .3 percent. Only Washington, D.C. notched a steeper decline at .4 percent.

Measured over the entire year, metro Atlanta’s 4.8 percent gain from September 2013 was the same as the average for all 20 metro areas in the report. Prices here are still below the July 2007 peak, they’ve rebounded to March 2004 levels, according to the index.

“The overall trend in home price increases continues to slow down,” said David Blitzer, an executive with the S&P Dow Jones Indices. “With the economy looking better than a year ago, the housing outlook for 2015 is stable to slightly better.”

Atlanta home prices bottomed out two years ago after plunging more deeply than those in all but a few other metros. Then they registered a string of double digit gains. Now price growth has returned to earth and should stabilize between 4 and 6 percent annually, says Eugene James, regional director for real estate data firm Metrostudy.

“Coming out of the recession, we were at the bottom of the market. So it was really easy to see huge percentage changes in values on the way back up to a normal housing market,” he said. “Gone are the days of double-digit percent changes in home prices which were unsustainable.”

Case-Shiller doesn’t track new home sales, home size or location. The Atlanta Board of Realtors, though, reported that 16,500 single-family homes sat on the market in July — a five month supply — and that the median sale price was $227,000. That’s a 7.1 percent rise from the year before and back to pre-recession levels.

Cobb, Fulton, DeKalb and Gwinnett, the region’s core metropolitan counties, have rebounded well from the recession, the Realtor’s group says. Outer counties still have a ways to go.

"For some reason Dunwoody is super hot right now," said Janice Overbeck, an agent with Atlanta Fine Homes Sotheby's International Realty. "East Cobb is also super hot with its top-rated schools, even though it's not in the very hot summer market season. Berkeley Park/Underwood Hills in Atlanta is an up-and-coming neighborhood where people are knocking down homes left and right to rebuild. Home values are really gaining strength there."

Beyond the hot spots, though, Overbeck says the typical year-end doldrums are reducing sales — and prices.
“It’s truly a seasonal, low-buyer situation and that’s why you’re seeing low prices in the housing index,” she said. “People are saying, ‘You know what? I’ll wait for more homes on the market in January or I’ll wait until the middle of March when it gets warm.”

CoreLogic, a real estate analytics agency, reported Tuesday that September’s foreclosure rate across metro Atlanta dipped below 1 percent, well below last year’s rate as well as the national rate. And the mortgage delinquency rate decreased too. Slightly more than 4 percent of mortgage loans in Atlanta were 90 days or more delinquent in September versus nearly 5.5 percent of loans a year earlier.

“We are absolutley moving toward a more healthy, more normal market,” James said. He said the region still has a backlog of foreclosures that need to sell, adding that many are being rented.

“But as those contracts expire,” he said, “they’ll be listing those homes for sale and they’ll get a much larger return today than two years ago.”