Last year (2016) was the best year for Atlanta residential real estate hom
e sales and prices ever, beating the previous marks set for both in 2015. However, the pace of growth moderated as the year progressed with election hysteria, a slowing economy, and insufficient inventory below $1 million putting pressure on market performance.
One clear trend emerged: home buyers sought out homes and areas where home prices still represent a value relative to traditionally
celebrated neighborhoods. The number of home sales in the five county metro was up 6% from May to December but sales among The Beacham Bellwethers which track the areas of Atlanta with the highest average sales prices (see page 4) declined 2%. Average home sales prices grew at the same pace (3%) for both categories.
Single family detached and townhome construction sales gained steam in 2016 and many builders appeared to be riding high in the saddle as 2017 began. Builders who can deliver product at a price buyers can/will pay in locations they want will be the big winners in 2017 and in the foreseeable future. The Atlanta housing market is starved for new condominium deliveries as evidenced by the increase in condo sales in 2016 – which was nearly double the increase for single family detached home sales on a percentage basis (+11% to +6%).
Seasonally adjusted housing inventory began increasing again late last fall but the increase is a “drop in the bucket” compared to the inventory needed to bring most of the market into a normal balance (six months of inventory supply). Currently, there is just a three months’ supply of housing inventory.
While there were more $3 million plus sales in Atlanta last year than any other year in the city’s history, the market conditions are not necessarily favorable. Inventory of ultra-luxury properties is at recent historic highs. For instance, the months’ supply of inventory in North Fulton for $3 million-plus homes is nearly eight years. In many areas of Buckhead, the months’ supply is more than three years. Until age demographics work back in seller’s favor, this part of the market is expected to heavily rely on price discounting.
Read more about the state of the Atlanta housing market in the current issue of The Beacham Insider.