Metro Atlanta’s home prices dipped in August

But short supply suggests metro area remains a seller’s market
Fewer homes are listed for sale, but those are sold quickly.  Even so, the end of summer brought a little softening of the metro Atlanta market. (Courtesy of Matt Wier)

Credit: Contributed, Opendoor

Credit: Contributed, Opendoor

Fewer homes are listed for sale, but those are sold quickly. Even so, the end of summer brought a little softening of the metro Atlanta market. (Courtesy of Matt Wier)

With the start of school, the intensity of homebuying usually fades, the pace of home sales slows and the sales price of a metro Atlanta home dips.

And unlike 2020, this year followed the pattern.

The median price of a home sold in August in the 28 counties of the region was $335,163 — 2% less than the price of a home sold in July, according to a report Monday from Re/Max.

It is the first time since January that the metro area’s home prices fell from the month before.

“The busiest home buying and selling months of 2021 are likely behind us,” said broker Kristen Jones, Re/Max Around Atlanta’s owner. “It has a lot to do with summer coming to an end and school starting. What we are seeing now is the typical cycle.”

Last year was the exception.

In both 2018 and 2019, the median price during the month slid 3.7% from July. But in 2020, sales were strong and prices edged up 0.9% in August.

It was the pandemic last year that made the difference: In the first several months, the market froze with many buyers in lockdown and many potential sellers skittish about showing their home to strangers. But as the economy tentatively reopened, many professionals were looking for newer digs for their work-from-home routines, so demand for homes spiked and prices rose robustly right through the summer.

Despite the weak August, prices last month were 17.5% higher than a year ago, Re/Max said.

And sellers are still largely favored by a market imbalance in which desirable homes for sale are still in short supply.

“I don’t think this (August report) has any impact on the long-term supply-demand issue,” Jones said. “Inventory is still extremely low and we are years away from supply catching up to demand.”

Prices expected to remain high amid little inventory

Inventory — that is, the number of homes listed for sale — last month represented only 1.3 months of sales. A year ago, the number of homes listed represented 1.6 months of sales.

In contrast, in a healthy, balanced market, inventory usually equals six or seven months of sales.

That mismatch of supply and demand has been worsening for years. After the collapse of the housing bubble and the deep recession that followed more than a decade ago, the number of homes for sale vastly outnumbered the demand. An epidemic of foreclosures added to the problem.

Many homebuilders went out of business and those that remained became very cautious about building.

Buyers are likely to be at a disadvantage for a long time, said John Ryan, chief marketing officer for Georgia Multiple Listing Service. “It seems like construction is trying to pick up, but I think we are two or three years out, if not longer, from getting to some balance.”

While the population of metro Atlanta continued to swell, construction of new housing has only been a fraction of the pre-recession pace. Meanwhile the rising price of land — and the zoning restrictions imposed by many municipalities — added incentives for building fewer but larger and more expensive homes.

The equation puts buyers in competition for the more affordable homes, which screens out many buyers as it pushes prices higher.

Last month, there were 9,470 homes sold in Atlanta, down 7.2% from July.

Sales of homes in any month typically reflect the showing of those places to potential buyers weeks before, so consumer habits in July make a difference in August, said Travis Reed, owner of Home Real Estate.

“When I talk to sellers getting ready to list, I tell them that July is the slowest month for showings, because it always is,” he said. “Everyone travels, which takes the buyers out of the market. This results in a dip in August.”

This year’s decline was smaller than usual, which points to a strong market, he said.

Number of home sales, metro Atlanta

August, 2021: 9,471

July, 2021: 10,201

August, 2020: 10,284

Source: Re/Max

Counties with most home sales in August

Fulton: 1,810

Gwinnett: 1,416

Cobb: 1,290

DeKalb: 927

Cherokee: 531

Forsyth: 437

Counties with highest median home price in August

Forsyth $475,000

Fulton $400,000

Cherokee $375,920

Fayette $369,025

Cobb $362,700

DeKalb $350,000

Gwinnett $350,000

Source: Re/Max Around Atlanta