Metro Atlanta home prices rose for the fourth consecutive month in July as historically low inventory and increased demand (the number of home sales in the first seven months of 2012 were the most in five years) have created a seller’s market. The current sales-to-list price ratio (95%) is the highest since the peak of the housing market in 2006 and the total days on market is lowest since the local MLS began tracking the statistic nearly 20 years ago. Top performing areas of Atlanta include Buckhead Northeast including Chastain Park, East Cobb, Morningside/Virginia Highlands and Midtown (condos). Also in this issue: a comparison of home price performance under each president since the 1960s and clarification on the new investment tax set to be implemented in 2013.
Metro Atlanta home sales were up 18% in the first quarter of 2012 compared to the first quarter of 2011. Home prices continued to fall however, except in several key areas. As a result of both factors, the number of homes on the market sank to its lowest level in decades. While sales were up almost uniformly among neighborhoods, Buckhead (30327), Brookhaven proper (30319) and Sandy Springs (30328) were among the few areas where home prices rose. Much of the reason for Buckhead’s increase was due to a lack of housing inventory as the number of homes on the market in Buckhead has fallen 65% from just one year ago and is at its lowest level in 15 years. The next several months will see an increase in the average home sales price as it does every year in Atlanta from March to June.
The best year for Atlanta real estate continued in the third quarter of 2011. Home sales were up 30% from the third quarter of 2010 with areas such as Alpharetta, Atlanta Intown, Brookhaven, Buckhead, Dunwoody, East Cobb and Sandy Springs leading the way. More than 40,000 homes have sold in 2011, the most since 2007. Even with such robust sales, home prices continue to fall. The average sales price for a home in metro Atlanta is down 12% from the third quarter a year ago. In this issue of The Beacham Insider, we take a look at what falling home prices and historically low interest rates have done to the average monthly mortgage in metro Atlanta. The monthly cost to purchase a typical home in metro Atlanta is now half what it was just four years ago. We also look at the importance of listing a home early in January to take advantage of the huge surge in home searches on the Internet.
The best year for Atlanta real estate since 2007 continued in the third quarter of 2011. The average Atlanta home price also rose 2%. Atlanta housing inventory is now at an eight-year low. Buckhead and Atlanta Intown real estate continue to pace the rest of the market. Single family home sales were up 17% in Buckhead real estate, while sales were up 28% for Atlanta Intown real estate. The second quarter report begs the question: With Atlanta home sales way up, Atlanta foreclosures down, and Atlanta housing inventory and home mortgage interest rates at historical lows, are the conditions right for a housing market rebound?
Metro Atlanta home sales increased 5% in the first quarter of 2011 compared to the same quarter a year ago, but prices slid 8% due to continued high levels of foreclosure sales that offset increased demand and dwindling housing supplies (metro Atlanta housing inventory is currently at a seven year low). Buckhead and Atlanta intown neighborhoods were among the bright spots for prices. Buckhead single family detached home prices were up 8% in the first quarter while Atlanta Intown (Ansley Park, Garden Hills, Morningside, Virginia-Highlands) were up 11% from a year ago. Alpharetta West/Roswell saw home prices increase 5%. The Buckhead home price increase can be attributed to a 31% drop in housing inventory from a year ago, leaving buyers with fewer choices and, in some cases, involved in bidding wars for homes that are new to the market and priced well. In March, more than 15% of new Beacham & Company listings went under contract within two weeks of being put on the market.
Metro Atlanta home sales slumped to the finish line in 2010 but Buckhead real estate was one of the lone bright spots. Buckhead home sales (units sold) were up 6% in the fourth quarter of 2010 and finished the year up 7%. Meanwhile, metro Atlanta home sales were down 21% in the fourth quarter and and finished the year down 7% despite being up 15% in the first six months of 2010. Buckhead home prices outperformed the metro Atlanta area in the fourth quarter (+3% in Buckhead vs. -3% for metro Atlanta) but for the year metro both metro Atlanta and Buckhead were up 1%. Indeed, Atlanta home prices appear to have stabilized over the last two years as they have moved up and down in a narrow range for that period of time. Affluent buyers seized on the opportunity to buy at the bottom of the market. Sales of $2 million-plus homes in Buckhead were up 67% in 2010 vs. 2009 and nearly half of those sales occurred in the fourth quarter.
Metro Atlanta home sales continued to trend upward in the second quarter, fueled by the homebuyer tax credit and continued downward pressure on home prices. As a result, metro Atlanta housing inventory is at its lowest level since July 2005. Sales in Atlanta’s most affluent areas outpaced the rest of metro Atlanta in the second quarter of 2010 versus the same quarter in 2009. The Beacham Bellwether Index of Atlanta’s 10 most affluent areas was up 25% compared to 15% for the rest of metro Atlanta. Home prices remained weak, although prices were down less in The Beacham Bellwether Index (-8% compared to -11% for metro Atlanta).
Metro Atlanta home sales were up seven percent in the first quarter of 2010, but many of Atlanta’s most affluent neighborhoods were up 40 percent or more including Alpharetta, Buckhead, Dunwoody, Sandy Springs and Vinings. Home prices were up six percent from a year ago but remain 26 percent below 2007 highs. Average sales prices have dropped 13 percent from average original list prices. Sellers are now getting 83 percent of their original list price compared to 95 percent a few years ago. East Cobb is one area of metro Atlanta where prices have outperformed the rest of the market. Home prices are up five percent in East Cobb from 2007. The most challenged segment of the market is the ultra high-end ($2 million and up). Sales of homes priced $2 million or more are down 66 percent from 2007.
Metro Atlanta home sales were up 3.3% in August, led by a whopping 19% jump in condo sales (single family detached home sales were up 1%). August was the second month in the last three in which home sales have increased. Pending sales were up 56% year-over-year following a jump of 29% in July.
Nationally, pending sales are at their highest level in two years. Metro Atlanta home prices remain soft however, and were down 16% in August. For the year, prices are down 18% year-to-date. The decline in August was the 21st consecutive monthly year-over-year decline in Atlanta prices. With metro Atlanta housing inventory at its lowest level since March 2006, prices are expected to recover sometime in 2010. One Beacham Bellwether area has outperformed the others in 2009: The area of Buckhead north of Chastain Park where sales are up 6% in 2009.
Metro Atlanta home sales rose in June for the first time in nine months and just the third time in 33 months as buyers took advantage of deeply discounted home prices, which are at levels not seen in nearly 10 years. Sales of single family detached homes and condos were up 2% from a year ago. Areas that led the way included Alpharetta West/Roswell, Atlanta Intown, Dunwoody, and Vinings proper. Prices were down 16% from June 2008 and down 22% from the all-time high of $209,999 set exactly two years ago in June 2007.
Positive forces are at work however, laying the ground work for a recovery. For instance, metro Atlanta home sales are about the sale level they were in the year 2000, but the population of metro Atlanta has increased 25% since then.