Those rising Atlanta home prices were rising a lot more slowly this past summer, according to a closely-watched report issued Tuesday.
Atlanta’s average home prices were up just 0.5 percent in July from the previous month after climbing 1 percent in June, according to the S&P Case-Shiller Home Price Index, which is calculated monthly.
Atlanta’s prices were 6.7 percent higher than a year ago, slightly better than the average increase nationally, according to Case-Shiller.
After rising steadily – and sometimes robustly – for more than two years, the average home prices in metro Atlanta have risen roughly 44 percent since hitting their trough. They are still roughly 13 percent below the peak prices reached in July 2007. Average prices now are back to the levels first reached in March 2004.
Case-Shiller calculates its index using weighted prices from several different months. A snapshot of July showed the median sale price of a metro Atlanta home was $225,000, according to the Atlanta Board of Realtors.
Demand for new homes has remained somewhat muted: Many households are still struggling financially, and even if they have recovered from the recession’s impact, they may have a credit rating that makes it hard to get a mortgage.
Consumers have been nervous: Even if they have a solid paycheck now, what about next month?
Moreover, there has been a drop in the rate of “household formation” – the number of marriages, divorces and adult children leaving home – that traditionally adds to demand for housing.
In 2012, one of every five adults ages 25 and older had never been married, according to a Pew Research Center analysis of Census data. In 1960, only about one in 10 of that age range had never been married.
Yet supply has been even more constrained than demand in Atlanta, so prices have kept rising.
Many homeowners can’t sell because they owe more on their mortgage than their house is worth. And the number of people changing jobs and moving from one place to another has been far lower than pre-recession – and that undercuts both sales and purchases.
However, recent months have seen a pickup, said Bill Adams, president of Adams Realtors in Atlanta.
“The best indicator is the number of closings – and that’s up,” he said. “There seems to be a little more confidence in the economy.”
Most of the buyers he has seen are local people. And in general, American mobility has been declining, according to Jed Kolko, chief economist of Trulia, a real estate research company.
In the 1950s and 1960s, Americans moved an average of once every five years, according to Kolko. That is now up to once every 8.5 years.
But there are signs that Atlanta is again becoming a popular destination, said Collette McDonald, an agent with RE/MAX Greater Atlanta. “What we are seeing in the marketplace is something we have not seen for four years, the number of relocations.”
Typically, inquiries from potential buyers come either from the Internet or from the sign in front of a home that is for sale. And lately there has been a change, she said: “I would say that about 50 percent of the buyers calling off the Internet listing are people who are relocating.”
That is consistent with a gradually healing economy where companies are increasingly willing to invest in expansion.
But there are other financial incentives, as well. For example, Atlanta was slower than most to emerge from the real estate recession. That means that in many other cities, homeowners are in better shape to sell, make money and hope for a bargain in Atlanta.
“As other markets get better, look for more people to be moving into this region,” said Eugene James, regional director for Metrostudy, which provides real estate data and analysis. “We should continue to see stronger in-migration trends.”
The past year’s price increases are not much different than the years before the housing bubble, he said. “We used to average 4 to 6 percent increases in a year. So we are getting closer to normal levels.”
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