Metro Atlanta home prices continue a steady upward march, finding some stability at a pace near the national annual rate of growth, according to an analysis of a closely-watched report released Tuesday.
Prices in the region climbed 4.9 percent compared to January 2014, according to the S&P/Case-Shiller Home Price Index. That was better than the 4.6 percent annual price gain for the benchmark 20-city index.
Metro Atlanta has settled into an annual growth rate near 5 percent in recent months, a relatively healthy figure after years of turbulence.
The January figures, measured as an index of sales of existing homes, come as the region gears up for buying season.
The supply of available homes remains near historic lows, but listings have grown in recent months as price increases have coaxed sellers into the market. Rising prices enable some homeowners who owe more than their homes had been worth to sell without having to pay off a loan out of pocket.
Jeff Humphreys, a University of Georgia economist, said another factor in tight supply is that many people still don’t believe they can sell their homes for their “reservation price,” the figure that incorporates pre-recession highs and inflation.
Humphreys said he expects metro prices to increase about 5 percent on an annual basis through 2015.
Marietta resident Karen Carlisle sold her home in the city’s historic district two days after listing it, getting an offer on her three-bedroom 1890s home for nearly her asking price.
“My Realtor said, ‘You best have something picked out because things are selling quickly,’” Carlisle said. She’s under contract to purchase another home in Marietta. “It’s definitely a seller’s market.”
The Atlanta region is still digging out of a housing and financial crisis that resulted in a historic spike in foreclosures, wrecked property values, eroded household wealth and pummeled local and state government coffers.
Home values plummeted to mid-1990s levels during the worst of the housing collapse, but have returned to early 2004 levels, during the economic boom, according to Case-Shiller data.
But the metro Atlanta recovery has been extremely uneven, a recent Atlanta Journal-Constitution evaluation of real estate data showed. The issue of homeowners being underwater, or owing more on a mortgage than their home is worth, is a particularly troublesome for areas generally along and south of I-20 or in outlying areas.
At the end of 2014, about one-in-four metro Atlanta homes with a mortgage was underwater, according to Zillow. Though that figure is about half what it was a few years ago, only four other major metros had higher rates. For homes priced under $116,000, only Detroit was worse.
UGA’s Humphreys said he expects prices of lower-tier homes to increase, but they have much further to go because lower-priced homes lost so much value in the crash.
On a national level, the Case-Shiller report showed Denver (8.4 percent), Miami (8.3 percent), Dallas (8.1 percent) and San Francisco (7.9 percent) had the biggest year-over-year price gains.
On a monthly, basis, however, metro Atlanta prices actually cooled a bit, down 0.2 percent compared to December. The 20-city index was flat.
Low mortgage rates, consumer confidence, job growth, low oil prices and low inflation are helping home prices, said David M. Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices. But there are challenges.
“Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback,” Blitzer said.
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