The retreat in Atlanta’s housing market is becoming a rout: the number of home sales last month took a double-digit tumble from a year ago, according to two reports issued this week.
While the reports do not track exactly the same turf, they paint similar pictures of a cooling market: The Atlanta Realtors Association reports that sales were off 10.3%, while Remax Georgia, which covers more of the metro area, says sales were down a dramatic 15%.
“A 15% decrease in home sales year-over-year in metro-Atlanta is a significant reduction and much more than the national average,” said John Rainey, Remax vice president. “While homes sales traditionally continue to decline in the fall, what we’re seeing locally is unusual.”
Reasons for the chill are many, the experts said:
The price of homes sold is rising much faster than most incomes, which discourages many buyers.
The median sales price of a home in metro Atlanta is up 9.5% from a year ago, according to Atlanta Realtors.
The fastest climb has been in Fulton, where sales in places like Buckhead and Alpharetta led to a 14% increase in the median price of a home. DeKalb was not far behind: home prices were up 13%.
In contrast, the median pay in Atlanta is up just 2.3% in the past year, according to Glassdoor, which tracks pay and jobs nationally.
Mortgage rates have edged up, effectively making homes more expensive to anyone not paying cash. The 30-year mortgage rate is currently averaging 4.85%, according to Wells Fargo. That is up about 1 percentage point in the past year.
Fewer homes are listed for sale than a year ago — a time when that inventory already seemed unnaturally skimpy. Listings now in metro Atlanta represent about 3.1 months of sales, according to Remax, less than a year ago and less than half of what most experts say is a balanced market.
That’s an average: Among higher-priced homes in many areas, there is often a surplus.
But there is an acute shortage at the modestly-priced end of the market, where a large group of potential homebuyers often compete with each other.
“It’s definitely still a seller’s market in the region,” Rainey said.
But the fundamentals are still strong, he said. “There is no reason for concern just yet … There are so many new jobs coming to the city that housing needs will not diminish any time soon.”
Brad Dillman, chief economist for Atlanta-based Cortland, a real estate investment company, said that imbalance can eventually swing back to hurt sellers.
In recent months, listings in desirable areas have sold quickly, but that could change.
The number of listings has ticked up in recent months, Dillman said. “With more competing supply, and buyers already hamstrung by high prices and recent breakouts in rates, some individual homeowners looking to sell in the months ahead may find themselves less liquid than they want to be — or need to be.”
Tribune Content Agency