Atlanta home prices continued to climb closer to pre-recession levels in April, but the rate of price appreciation moderated, in part due to a 23% increase in local housing inventory. Meanwhile, the number of homes sold fell for the sixth consecutive month, but Atlanta’s housing market continued to outperform the rest of the country.
According to First Multiple Listing Service (FMLS), the average home sales price in Atlanta was $263,667 in April, a 5.7% increase from April 2013 but not the robust 20 percent-plus appreciation rate seen in 2013. Nationally, the median home sales price increased 5.2% according to figures recently released by the National Association of Realtors (NAR).
Lawrence Yun, NAR’s chief economist, said in an online article on May 23 for REALTOR Magazine that “current price data suggests a trend of slower (price) growth, which bodes well for preserving favorable affordability conditions in much of the country
Housing affordability was the subject of a Wall Street Journal article on May 23. According to the Journal, “less buying at the (housing) market’s lower end by first-time buyers has contributed to limiting sales of existing homes so far this year to a pace of roughly 88 percent of their 10-year average.”
“We likely have hit the bottom in the past six months or so regarding the lack of participation of first-time buyers,” said Yun in the WSJ article. “It may take three years to return to normal first-time-buyer participation.”
Atlanta’s reputation for housing affordability and popularity with young professionals may have negated national trends. Local home sales were down just 1.5% last month after being down 7% over the first two months of the year. Nationally, home sales did not fare as well. According to NAR, U.S. home sales were down 6.8% in April.
The local real estate market also got a boost from a much-needed infusion of new housing inventory since the first of the year. There were 4,000 more homes for sale in April than the same time last year (see accompanying chart), but not all areas of Atlanta saw inventory rise. Inventory in Buckhead remained unchanged from a year ago and with predictable results. Sales of Buckhead homes were down 21 percent in April from April 2013, but the average home sales price in Buckhead was up 20 percent to $930,872, the second highest average ever for the month of April.
Dac Carver, Vice President and Managing Broker for Beacham & Company, Realtors, said that the current housing market defies all conventional comparisons although the importance of listing inventory has not changed.
“The market needs more inventory in just about every price range and area,” Carver said. “It is not unusual for our agents to receive several offers on a property and negotiate very favorable terms for the seller. It’s still a seller’s market despite the recent inventory gains.”
Time may be running out for some sellers however. A recent panel of Atlanta appraisers who appeared at a meeting for SunTrust Mortgage said that because of anticipated increases in local housing inventory, prices are likely to moderate even further. New home construction will be a significant contributor to the growth in inventory, said Mike Fitzmeyer, Vice President and Sales Manager for SunTrust Mortgage in Atlanta.
“The general consensus among the appraisers on the panel was that sellers should sell this year while home prices are still going up,” Fitzmeyer said.
On the high end of the market, sales of homes priced $1 million or more were down 16.4% in a marked change from earlier in the year. Year-to-date, sales of homes for $1 million or more were still up 3.2%, but clearly demand weakened in March and April.
There were 157 sales for more than $1 million through the first four months of this year compared to 152 sales in 2013. Of those 157 home sales, 45.2% were in Buckhead. The average sales price of all $1 million-plus homes increased 3.1% year-to-date to $1,481,123, but prices got weaker the higher a home was priced above $1 million.
Beacham & Company, Realtors is an independent, locally-owned, full service residential real estate brokerage firm that specializes in Atlanta luxury real estate. The firm is located in the heart of Buckhead at One Buckhead Plaza next to the St. Regis Hotel and has more than 80 licensed sales associates. Beacham is the top selling office in Atlanta by dollar volume of listings sold and its agents are the most productive by dollar volume of real estate sold.
