Metro home prices, sales rise amid tight supply

Supply of homes for sale: 3.8 months, unchanged from a year ago

Source: Atlanta Board of Realtors

Metro Atlanta home sales are posting strong gains this spring — and so are prices as the number of houses for sale remains unusually low.

About 4,400 homes were sold in April at a median price of $229,000, up 5.5 percent from March and 12.3 percent from a year earlier, the Atlanta Board of Realtors reported Tuesday.

“We are having a great spring,” said Ennis Antoine, president of the board.

For buyers, however, the market is a little less friendly: In hotter areas, they must rush to see homes, hurry to make offers and sometimes even out-bid other buyers. It is a little like an accelerating treadmill: April’s pace is faster than that of March, when the median sales price was up 4.3 percent from the month before and 8.3 percent up from a year earlier.

Throughout the spring, the supply of homes has held around 3.8 months of sales, which the Realtors board regards as slightly more than half of a healthy ratio.

While no single headwind has held back supply, a series of smaller gusts has combined to slow it. First-time home buyers remain cautious in the wake of the housing bust, and people who already own homes are less eager to move up than during the boom.

Jay Simmons, a millenial with the means and desire to own property, as well as some parental help with the down payment, discovered what a sellers’ market looks like when he started looking for a home convenient to Midtown.

“It’s been tough to get in to see one because you’d get there and there were already offers,” said Simmons, 32.

He moved to Atlanta last fall to take a job as an investment analyst and has been sharing a Virginia Highlands house with some friends. At one point, he received an email from his agent, Tracy Dowdell at RE/MAX Metro Atlanta Cityside, telling him about a house in Peachtree Hills that had just been listed. “It sounded like something I’d like. But by lunch it was under contract.”

He now has a deal to buy a two-bedroom home in Morningside.

In the heady days of the housing boom, construction was frenzied, credit was easy and there was a steady stream of buyers, both first-timers and move-ups.

While most experts say they do not want a return to that kind of frantic market, they often worry that the current rise in prices is a sign that the market isn’t quite normal: Demand is good, but the weak supply of homes for sale is skewing values.

Adding to the unease, some buyers have trouble getting the mortgage they want, said Justin Seeby, a principal in the Graham Seeby Group.

Banks will only loan the amount for which a house is appraised, a figure based on prior sales. In hot markets, appraisals underestimate a home’s current value, he said.

“The market has turned so quickly that you’ll get four willing-and-able buyers ready to pay above the asking price, and then the appraiser will come in below the listing price.”

Some metro Atlantans stand on both sides of the buy-sell equation.

Paul Valeck owns a condo that overlooks Piedmont Park in Atlanta and isn’t far from the Beltline. He loves the spot, although he’d also like a yard. So he’s been in the hunt for a house.

“I went to a house off Monroe (Drive), the first day it was being shown. There was a Florida couple there that had put an offer on it – without even seeing it.”

Valeck, a corporate strategist, now has a tentative deal for a three-bedroom home in Virginia Highlands.

The market is much stronger in some spots than others with some parts of the region – especially south of the city – still struggling.

In thriving Buckhead, the surging real estate is carried along by the economy, said Ben Hirsh, realtor at Hirsh Real Estate Specialists. Expansion of local companies has combined with corporate relocations to pump jobs into the city and the near-northern suburbs, boosting home sales, he said.

“I’m watching the job market. The increases we are seeing seem entirely justified.”