Metro Atlanta’s median home price last month reached $349,000, rising again after a lull of several months, as the supply of homes for sale continued to dwindle, according to a report from Re/Max.
After leveling off in late summer, prices moved up 4% in October from the month before.
Prices had been rising steadily for years, but a pandemic-enhanced sellers’ market has lifted the median price of a home in the region’s 28 counties by 20% since October 2020 and by a stunning 40% since the fall of 2019, said Kristen Jones, the owner of Re/Max Around Atlanta, a real estate brokerage.
In recent months, the combination of higher prices and a scarcity of listings has meant fewer and fewer sales, she said. The number of sales dropped by more than 13% compared with October of last year.
In a market in which sellers and buyers have roughly equal negotiating power, the number of homes listed for sale typically represents about six or seven months of sales. In contrast, last month listings represented just 1.3 months of sales.
Among the more active housing markets last month, Forsyth County houses had the highest price, a median of $480,000. The most homes — 1,538 — were sold in Fulton County. Gwinnett had the hottest market, with homes listed only an average of 15 days before a sale, according to Re/Max Around Atlanta.
Demand is fueled by a growing economy and the addition of good-paying jobs. Moreover, low interest rates make homebuying more inviting by minimizing monthly mortgage payments.
Despite the run-up in Atlanta-area prices, the region is still relatively affordable compared to many other metro areas, said Cory Hopkins, managing editor of economic research for Zillow, the Seattle-based home-listing company.
“First-time buyers are at a bit of a disadvantage in this market, unable to rely on the proceeds from a prior home sale to help pad their down-payment,” he said.
Wage growth has been relatively strong by historical standards, but is still on average less than 5% per year, according to the Atlanta Federal Reserve.
Home prices are rising a lot faster.
Meanwhile, inventory — that is, the number of homes listed for sale — has kept shrinking.
Experts chalk up the lack of listings to a number of factors, starting with the massive surplus left by the burst of the housing bubble in 2007. The ensuing recession put many builders out of business and convinced the survivors to be cautious about new construction.
Building has never recovered to pre-bubble levels, even though the region’s population has continued to grow.
Even when builders wanted to take advantage of the rising prices, many have found the process to be slow going because of various legal and zoning restrictions.
“Across Georgia and in greater Atlanta, there are local laws mandating minimum lot sizes, minimum square footage requirements, and building setbacks,” said Erica Smith Ewing, senior attorney for the Institute for Justice, a libertarian-leaning, nonprofit law firm. “These laws all make housing more expensive.”
The group is currently suing the city of Doraville for its housing code enforcement practices and the city of Calhoun for its building code requirements.
Metro Atlanta home sales, October 2021
Median home price: $349,000
Price compared to Oct., 2020: up 20.3%
Number of home sales: 8,509
Number of home sales, compared to Oct., 2020: down 13.4%
Metro Atlanta median home price milestones
July 2000: $150,000
May 2015: $200,000
June 2018: $250,000
March 2021: $300,000
Median sales price, most active counties
Source: Re/Max, Re/Max Around Atlanta