The strong summer and fall market was bad news for housing inventory, however. Unable to keep pace with buyer demand, the inventory of homes for sale in Atlanta dropped below the level from a year ago. Some areas had a three months’ supply or less at the end of October (six months is considered a market in balance between supply and demand by the National Association of Realtors). Lack of adequate housing inventory is expected to cause a continued slowdown in the housing market in the final two months of the year, although 2015 is still on pace to be the best year ever for the Atlanta real estate market.
Areas of Atlanta where sales outperformed the overall market included East Cobb, Midtown (on the strength of condo sales), Alpharetta West-Milton-Roswell, and Smyrna/Vinings. All of those areas had an average home sales price (when single family detached and condo sales are combined) that was close to the average for the five-county metro ($285,475), which increased 6% from the third quarter of 2014.
The high-end market performed better than the overall market in terms of sales growth but it was often at the expense of sales prices. From $1 million to $1.5 million, the number of home sales was up 30.5%% but the average home sales price decreased 7.1%. From $1.5 million to $2 million, sales rose 27.5% but prices were flat. Sales of homes for $2 million or more (35 total sales) increased 94% but the average home sales price fell 1.9%.
Areas where home sales of $1 million or more increased the most included Atlanta Intown (Morningside and Virginia-Highland), East Cobb, Alpharetta West-Milton-Roswell, and Sandy Springs inside I-285. Sales of $1 million-plus homes in Buckhead were flat although Buckhead represented more than half of the overall market.
The inventory situation for homes priced more than $1 million sharply contrasted with the rest of the market at the end of October. The number of $1 million-plus homes on the market increased from 2014 and in some cases substantially. In Buckhead, single family detached inventory rose 24.1% although new home inventory in that price range declined. In Alpharetta West-Milton-Roswell, $1 million-plus inventory jumped 35.2%.
Dac Carver, Vice President and Managing Broker of Beacham & Company, said the divergence between the market above and below $1 million has a lot to do with demographics.
“The Baby Boomer generation wants to downsize, but the generation behind them is not large enough to absorb the number of big homes coming on the market,” Carver said. “Atlanta’s population growth and strong economy are mitigating factors but it won’t be enough until the Millennials start buying those homes.”
Beacham & Company, REALTORS continued to outperform the market in the third quarter. Company sales were up 21.8% while dollar volume sold was up 26.1%. The company exceeded sales and dollar volume sold for all of 2014 in mid-September of this year.
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