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
Counties with most home sales in August
Counties with highest median home price in August
Source: Re/Max Around Atlanta