Metro Atlanta home prices rose less steeply in March than previous months, despite a continued shortfall in the supply of homes listed for sale, according to separate market reports.
In a further sign the real estate market might be starting to cool after several years of dramatic gains, the number of home sales fell sharply last month.
The median price of a home sold in 11 counties at the center of the region was $275,000 in March, up 3.8 percent from a year earlier, according to the Atlanta Realtors Association. That compares with year-on-year increases of 5.6 percent in February and 7.6 percent a year ago.
Yet the number of homes sold during the month was 8.9 percent below that of March 2018 as fewer buyers and sellers found common ground. Home sales volume has been declining for several months in metro Atlanta, including a 7.4 percent drop in February.
Inventory — listings of homes for sale — is less than half what it is in a market where buyers and sellers hold equal sway, said Torrence Ford, owner of Atlanta-based Re/Max Premier. The number of homes being sold has declined since 2018 "because of inventory levels and in some markets because buyers may be priced out of an area," he added.
Interest rates rose last year but then dipped and seem unlikely to rise soon – a boon to home buyers. But buyers must also cope with real estate taxes – a growing burden as home prices increase.
And prices are generally way up. After a painful crash and lingering recession, average metro Atlanta home prices have soared about 80 percent since the market hit bottom in 2012.
A hot market can come with its own coolant – starting with affordability.
Price increases have outpaced growth in incomes, shrinking the pool of potential buyers. Meanwhile, the higher price of land and labor has forced developers to build ever-more-expensive homes to recoup their costs.
In the past, wannabe buyers in Atlanta were quick to hop into cars and drive as far as it took to find cheaper housing. Yet the new crop of young professionals – often burdened with more debt than previous generations – are marrying later, having children later and buying homes later and less frequently.
Moreover, many disdain the idea of long commutes and exurban living.
That further propels prices in desirable areas. During the past two years, prices have climbed 27 percent in Morningside, 38 percent in Inman Park and 23 percent in Kirkwood, three intown neighborhoods, according to Bill Adams, president of Adams Realtors.
In contrast, average Atlanta pay has been increasing at less than 4 percent a year, according to various measures.
Yet affordability is relative. Compared with some major metros, Atlanta home prices look pretty good.
Edison Farrow, 55, is an event promoter who books various acts into theaters. He and his partner are moving to Atlanta after 15 years in Florida and made an offer on a three-bedroom townhome in Smyrna for about $285,000.
He chuckled at the idea that Atlanta is losing its affordability: He sold his condo in Miami Beach for $350,000.
“We are downsizing in price and upsizing in home,” he said.
Among the core counties, Fulton had the highest median price for a home sold in March: $315,000, an increase of 11 percent from a year earlier, according to Re/Max. But Gwinnett and Cobb each saw prices edge up only 2 percent, while DeKalb prices dipped 4 percent and Clayton prices fell 5 percent.
Home price median year-over-over increase:
March: 3.8 percent
February 5.6 percent
January: 4.9 percent
December: 7.6 percent
November: 7.3 percent
October: 9.1 percent
Source: Atlanta Realtors Association
March annual comparison:
Total Home Sales: -8.9%
Median Sales Price: +3.8%
Source: Atlanta Realtors Association
Metro Atlanta housing market:
Total Home Sales: 4,699
Median Sales Price: $275,000
Average Sales Price: $344,000
Source: Atlanta Realtors Association
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