Metro Atlanta home prices rose more than 13 percent in January from a year earlier, the latest in a string of indicators suggesting a rebound for a key segment of the region’s economy.
The metro area’s annual gain in the widely watched Case-Shiller home sale price report was among the highest in the survey of 20 metropolitan areas. Metro Atlanta also gained 1 percent from December.
Values should keep improving, said Eugene James, Atlanta regional director for Metrostudy.
“There is very strong demand for housing and very low inventory levels,” said James, whose firm tracks local housing market trends. That will drive prices higher, he said.
James noted that the Case-Shiller report looks at home resales and doesn’t take into consideration new home construction, a segment that was shattered by the housing bust but has begun to revive.
“As of January, Atlanta had the fifth-strongest new construction permits in the country,” James said.”Most builders are saying they can’t build fast enough to meet the demand.”
Metro Atlanta’s annual gain for January beat the national figure of 7.3 percent, but the region has a longer way to go in making up for ground lost.
By Case Shiller’s measure, metro Atlanta’s values are still at late 1990s levels, beating only Detroit. Among all metro areas, average prices are at autumn 2003 levels, according to the Case Shiller report.
The continuing effect of the bust becomes clear when owners feel they have no choice but to get out from under loans taken out during the boom.
Audrey Keith-Wilson of Fairburn put her home on the market in April 2012, two years after she was laid off. She paid $146,000 for the home in 2003; it sold in January for about $60,000. It was a short sale, in which the lender assumes the loss when a home is sold for less than the outstanding mortgage principal.
“I knew the market had gone down, but I didn’t think it would be less than half price,” said Keith-Wilson, who found a job with an insurer in Columbia, S.C., and now lives there. Keith-Wilson said she’d thought about renting the property but wouldn’t have been able to cover the mortgage.
Such situations may not disappear, but they should become less common if trends in the Case Shiller report continue. The market is benefitting from fewer foreclosures, which pull down prices, as well as low interest rates, more home construction and a stronger economy. The latter means more jobs and job security, both crucial to housing.
Tighter inventories also push prices higher. Metro Atlanta has seen fewer home listings partly because of homeowners’ unwillingness to accept prices below what they owe. Home listings in metro Atlanta were down 32 percent in February compared with the same month in 2012, according to the real estate website Zillow.com.
Bernard Strong, an agent with Better Homes and Gardens Real Estate / Metro Brokers who sells homes in southwest Atlanta, said there are “many buyers in the market,” but the biggest challenge he faces is in dealing with bank appraisers who low-ball values.
“You have a ready buyer and a seller ready to make a transaction, and the appraiser comes in with another figure, and the bank goes with the appraiser,” Strong said. “We’re in an up market now, so I’m hoping that appraisers will not be afraid to reach up with their values.”
Atlanta was among eight metro areas with double-digit annual gains in prices, according to Case-Shiller. The others were Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix and San Francisco.
“Economic data continues to support the housing recovery,” said David Blitzer, who chairs the Index Committee at S&P Dow Jones Indices, which produces the Case-Shiller report.
Home prices nationally are still about 30 percent below their peaks in 2006, however, even if the 7.3 percent rise year over year was the biggest increase since the summer of 2006.
For potential sellers who are waiting for the right price, Keith-Wilson has some advice.
“Don’t sell unless you absolutely have to and have patience,” she said. “You definitely need patience.”
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