Realtor group: Home prices up 9 percent

Sally Gilley, a senior analyst for the federal government, has been looking to downsize from her large Conyers home since October.

Even with home prices up 9 percent over the last year and an inventory that remains tight, according to an Atlanta Board of Realtors report Friday, Gilley is confident she’ll be able to find and afford the right home in the right area with the help of low interest rates.

“Now just feels like a good time to buy,” said Gilley, who is shopping for a condo or townhouse in the Brookhaven section of DeKalb County. “I’m going to be retiring within six and a half years, and I don’t want to do anymore yard work.”

While not as robust as last year, this year’s housing market will continue to strengthen, with more homes on the market and favorable interest rates that should help take the sting out of rising prices, the Realtors group predicts.

“Home prices in 2014 were especially strong,” Ennis Antoine, the Atlanta Board of Realtors’ new president, said in releasing his group’s report. “I expect them to continue to accelerate in 2015, but at a tempered pace, allowing homes to remain affordable for first-time buyers.”

Another report this week from RE/MAX of Georgia echoed expectations of more opportunities for buyers to find a home they can afford. Among RE/MAX’s predictions:

• More traditional buyers will return to the market as institutional investors purchase fewer homes.

• Millennials will represent the largest group of first-time buyers.

• Lending restrictions will ease, giving more prospective buyers a chance to close on a loan.

The median price of homes for sale in metro Atlanta rose to $212,000 in December, up from $194,000 for the same month a year earlier, according to the Board of Realtors report. The median is the midpoint where half the sales prices are below and half are above.

“Prices have been going up everywhere,” said Eugene James, Atlanta regional director at Metrostudy, which tracks housing trends.

“The housing recovery started first and foremost primarily in the northern counties (North Fulton, Cobb, Forsyth and parts of Gwinnett),” he said. “We’re reaching a normalized pace of price escalation in the hottest portions.”

James said other areas are now catching up, including South Fulton, Paulding and Henry counties.

Mortgage rates remain favorable and should remain low, according to the Board of Realtors, which represents more than 5,000 real estate professionals.

The rate on a 30-year fixed mortgage was 3.8 percent, while a 15-year fixed rate was 3.12 percent, both down slightly from last week, according to Bankrate.com.

Antoine said it’s a seller’s market but sellers should be realistic in pricing.

“Make sure that the price is right,” he said, noting that overpriced homes still have to be appraised, and the appraisal could jeopardize a buyer’s ability to secure a loan.

Sales rose 19 percent in December compared with November, according to the Realtors report, but the spike last month was typical for that time of year. Many buyers responded to year-end builder incentives. Homebuyers were also looking to close loans to benefit from tax deductions in 2015.

The hope is that as prices keep rising more people with put homes on the market — including thousands of foreclosed homes snapped up during the housing bust. Large investors have been holding on to the properties and renting them. Rents, according to James at Metrostudy, also are expected to continue rising this year due to the lack of homes available for sale.

Even though overall inventory rose 31 percent last month from the previous December, metro Atlanta only has a 3.8 month’s supply of homes for sale; six or seven months’ worth is considered normal.

According to RE/MAX, while owners are recouping some of the equity lost during the housing bust, many haven’t recouped enough to list their homes, which would help increase supply.