UPDATE: Metro Atlanta housing basics good, prices up, but listings are down

In the past year, the metro Atlanta housing market has kept moving forward by most measures – but the exceptions are enough to give pause.

For sure, the median prices of homes sold has continued to rise, steadily if not spectacularly, by nearly all surveys. According to Re/Max Georgia, for example, the median Atlanta home price last month was $222,130 – up 6 percent from a year before.

And the spring is when there is the largest rush of homes onto the market and the most frenetic search for purchases, so many real estate professionals say they expect the next few months to be very strong.

Of course, real estate people are optimistic – almost by definition. And there are fundamental reasons to be upbeat.

The basic equation for housing has been healthy: job growth, income growth, low interest rates. There is some concern about rates, but they are still historically low.

But there is a troubling variable: inventory – that is, the number of homes for sale. The number of homes listed for sale is down 9 percent from a year earlier, Re/Max said.

A weak flow of for-sale homes in many areas means that sellers have the advantage, buyers bid against each other, prices go up and some first-time, lower-income households get priced out of the market.

And, since first-time buyers are crucial to long term growth, anything that shuts them out can ultimately have something of a chilling effect on the market.

Some of the problem is in a reluctance of homeowners to sell. Anyone who bought during the last years of the housing bubble – or who re-financed their way out of equity – may be inclined to hold on to their home until they can turn a profit on the sale.

But much of the shortfall is because construction has not caught up with demand. And that is at least partly because building is dominated now by big companies who are more cautious than the many small builders who powered metro Atlanta’s boom.

The big builders may also be building more in other metros where the profits are higher.

So the Atlanta market will catch up with demand, but it may take some time. Meanwhile, inventories are shallow and the prices keep going up.

A year ago, Atlanta prices were up 5.7 percent from the year before.