Metro Atlanta home prices flat in July as market finds elusive balance

The reflection of a Norcross house under construction is seen in the window of a home that is under contract. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

Credit: ALYSSA.POINTER@AJC.COM

Combined ShapeCaption
The reflection of a Norcross house under construction is seen in the window of a home that is under contract. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

Credit: ALYSSA.POINTER@AJC.COM

Equilibrium could prove short-lived amid tight housing stock

After a year of pandemic-fueled surges, the metro Atlanta housing market clicked into balance in July: Supply met demand and home prices stopped their rapid rise.

At least temporarily.

Overall demand eased last month while the supply of homes for sale grew modestly and the median price of a home sale held steady at $345,000, the same as June, according to Re/Max.

That’s not much consolation for prospective buyers: Area home prices were still 21.5% higher than a year earlier.

The summer pause in price hikes also could be brief, since the number of homes for sale remains at historically low levels and it is still a seller’s market, said John Hunt, principal of MarketNsight, which tracks the housing market.

The number of listings was up 10% from June to July, but was still 34.6% below the level of a year earlier. About 12,300 homes were listed for sale last month, less than one-third of what is needed to meet demand, according to Hunt. New construction accounted for just 4% of the increase in listings

“It is far from being enough,” he said. “We still have a massive housing shortage everywhere.”

An easing of the frenzy should not be confused with a lasting equilibrium, agreed broker Kristen Jones, owner of Re/Max Around Atlanta. She said the number of listings in July equaled 1.3 months of home sales, compared with six months in a typically balanced market.

Demand for homes has soared over the past year because the economy has been growing and the pandemic did limited damage to white-collar jobs — many held by a huge cohort of millennials increasingly ready to own instead of rent.

At the same time, the number of homes for sale steadily fell, partly because many homeowners didn’t want to venture out or allow people in their house with COVID-19 circulating. The mismatch forced wannabe buyers to bid against each other, pushing prices higher.

But as summer started, hopes rose of an end to the pandemic and a return to normal.

“As many popular travel destinations reopened, many pandemic-weary travelers returned to the skies, beaches — just about anywhere but their living rooms,” said Cynthia Lippert, president of the Atlanta Realtors Association.

Demand for homes also typically dips once a school year begins.

The Re/Max report covers 28 counties. A report from the Atlanta Realtors Association, also showing prices flat in July, covers 11 counties.

Each county and each neighborhood within it has its own market, some hotter, some cooler. Forsyth had the highest-priced sales — a median of $479,000 for the 495 homes sold in the past year. Fulton had the most sales, 1,880 homes with a median price of $415,000.

In the city of Atlanta, home prices are up 20% from a year ago, according to Bill Adams, president of Adams Realtors. But the change in price ranges from a decline of 3% in Candler Park to a leap of 36% in Inman Park, he said.

The trend of higher prices is going to continue because there won’t be a large increase in homes listed for sale, he predicted.

“It could be that the only thing that will dampen the market is an increase in mortgage interest rates,” Adams said. “I know this sounds like a broken record.”


Metro Atlanta housing market, July

Number of sales: 9,748

Sales compared to last year: -11.6%

Median price: $345,000

Price compared to last year: +21.5%

Supply of home listed for sale: 1.1 months of sales

Supply compared to last year: -34.6%

Source: Re/Max

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Median sales price, largest counties, July 2021

Cherokee: $376,649

Clayton: $210,000

Cobb: $375,000

Coweta: $392,500

DeKalb: $355,000

Fayette: $384,500

Forsyth: $479,000

Fulton: $415,000

Gwinnett: $350,000

Henry: $322,500

Source: Re/Max Around Atlanta