For prospective buyers, venturing into the Atlanta housing market is a little like stumbling into a rapid-fire auction.
They have to pay close attention, act quickly, bend a little on features and be prepared to raise their bid to win.
“We knew it was a hot market,” said Mark Viglotti, 27, who recently took the plunge and wound up with a house in Brookhaven. “So we had to tamp down expectations. You have to make a decision quickly.”
First time buyers like Viglotti are crucial to a healthy housing market, spurring demand at the lower end and enabling existing owners to move on. But many first-timers opted to stay on the sidelines after the housing bust.
Now, there are signs they’re back in the game.
In the first three months of the year the number of new-owner households formed was double that of renter households, according to an analysis of Census Bureau data. First-time buyers now account for 42 percent of purchases, up from 31 percent in 2011, according to Fannie Mae.
But that differs by area. Some parts of Atlanta’s market are lagging — in some cases by a lot.
Schools, commutes to big employment centers and access to transit can affect values and demand. Sometimes it's just cosmetic, said David Konzen, an agent with Re/Max of Greater Atlanta, citing a part of Decatur where he has struggled to get a home sold.
“A lot of first-time homebuyers like to live in cool areas and this looks really bland. The untrained eye looks and says, ‘Oh, this is run down,’ but it’s not.”
Kristin Jackson, 27, got married in December. Since the lease on their Brookhaven rental was up in May, she and her husband started looking for a house.
“Every open house there were about 30 people there, a lot of them our age, and a lot of couples,” Jackson said. “Right now it’s so crazy. You really have to go in with a strong offer.”
Ready for roots
They found a home in Roswell, not quite as close to its square as they wanted, but as close as they could find in their price range. They made a strong offer and were accepted. The house cost something over $300,000, and they made a down payment of 5 percent.
Jackson said she won’t worry too much about the short-term gyrations of the market.
“I grew up in East Cobb and I love Atlanta,” she said. “I am hoping that we are never going to move.”
Homebuyers in the past were often warned not to buy if they weren’t sure they’d be in the home long enough to make up for the short-term costs of a purchase. But like Jackson, many first-time buyers around Atlanta say that’s not an issue.
Many millennials are children of parents who migrated to the Atlanta area. Family ties and solid job growth here provide incentives to stay. Moreover, Americans in general are less mobile than in the past. That rootedness is good for housing demand.
Drew Johnson, 25, and his wife started looking several months ago, mainly on the north side of town.
‘We want to be here’
“We have seen about 25 homes, and we haven’t found anything that wowed us,” he said. “But we are both from Atlanta and we want to be here. That is a big reason that we are comfortable looking here.”
But the lower mobility may also contribute to the tight supply. And too much demand chasing too few homes is a formula for higher prices.
“If you put something on the market at about $400,000 there could be multiple offers by midnight,” said Shapiro. “I have seen some homes have 15 offers.”
The trajectory of higher prices and growing demand will likely continue, said Brad Hunter, chief economist for HomeAdvisor, an online home services marketplace.
“New home closings are running at just under 20,000 a year (in metro Atlanta), implying a lot more room for housing to increase.”
“I expect to see home price appreciation that outpaces the nation as a whole for the next few years,” he said.
Metro Atlanta housing snapshot
Number of homes sold in April: 7,475
Median price: $224,900
Homes for sale: equal to 2.2 months of sales
County with most sales: Gwinnett, 938
County with highest median price: Fulton, $360,000
Michael E. Kanell, the AJC's economics writer, has been reporting on jobs, housing and the economy at the AJC for nearly two decades. He has appeared on television and radio to analyze and report on business and economic developments.