We’ve described the Atlanta housing market in a recent issue as amoeba-like for its propensity to avoid attempts to neatly encapsulate it. Now, the market almost seems like a stress ball being squeezed and the pressure points are areas of town that offer value to the growing pool of Millennial home buyers.
Home sales in the five core Atlanta counties where the average sales price was between $450,000 and $750,000 in top performing public school districts were stronger than usual to begin the spring market. Meanwhile, old in-town stalwarts such as Buckhead and Morningside where average sales prices hover around $1 million stalled. While $450,000 to $750,000 isn’t normally associated with “starter homes,” the current issue of REALTOR® Magazine notes that many Millennials are skipping a starter home and already in the “first time move-up” category whether by choice or market conditions.
Some Millennial buyers are just as picky as some Baby Boomers are complacent in their current homes. These two factors have combined to create a low inventory, suddenly slow sales growth environment for the market as a whole. The number of closings in Atlanta in 2018 is up just 1% compared to the record sales year that was 2017. Take out attached (condos and townhomes) sales, and the single family home market is down from last year. Condos are appreciating in price faster than single family homes for the first time perhaps ever. Buyers are flocking to attached properties because they are more affordable in general than single family and maintenance costs are shared with other homeowners. However, the condo market gets very thin when the price is more than $500,000-$600,000.
Developers are watching. The “Westside” below 14th Street (some developers and exhuberant local media types have tabbed the area north of 14th Street as the “Upper Westside”) continues to attract investment as it attempts to become the next East Atlanta. Many Midtown real estate agents are even coding their Midtown properties in the local MLS to match the Westside geographic category so not to miss capturing Millennials and others who are gravitating westward forvalue and proximity to all of the intown trappings.
Millennials who want to buy intown should not be affected by the looming Fulton County property tax reassessments in June since taxes are set at the purchase price for the first year. However, homes that have not changed hands in recent years and have risen in market value are sure to feel the sting in June (see article on page 3). Sellers who cling to an unattainable list price may be forced to readjust to reflect a new property assessment reality.