Though Labor Day traditionally signals the end of summer, the Atlanta residential real estate market is showing no signs of hitting a typical fall decline. The August Cal-Culator, Atlanta’s residential real estate index, rose 0.1 from July to reach a 6.2, the record that was set by the June index. Large home price increases in Atlanta, continued falling foreclosure numbers and increased affordability, partly due to increased inventory, led to the rise in the index.
S&P/Case-Shiller Home Price Indices’ report released on August 26 revealed that while U.S. home prices “sustained slowdown in price increases,” nationally home prices rose 6.2 percent in the last year, while Atlanta posted an 8.6 percent change year over year, including distressed properties.
CoreLogic’s latest Home Price Index Report discovered that Atlanta had the fourth largest increase in home prices in U.S. metro regions during the past year.
“Most states are reaching price levels not seen since the boom year of 2006,” said Anand Nallathambi, president and CEO of CoreLogic. “Our data indicates that this trend will continue with more states hitting new all-time peaks at this year and into 2015 as the recovery continues.”
Inventory and Affordability
The inventory crunch that has plagued the nation remains tight although inventory has been on the rise, according to Zillow’s Real Estate Market Report. Partly due to increased inventory, homes remain affordable in 94 of the country’s largest 100 metro regions compared to historical averages. Unfortunately for renters, rent is more expensive than ever in 88 of the markets. As home prices took a drop during the recession, rents maintained their upward trajectory.
CoreLogic’s latest National Foreclosure Report shows the number of completed foreclosures fell 21.2 percent year over year and 8.5 percent from the previous year, both good signs that the total number of homes lost to foreclosure is declining.
“Based on current trends, the overall foreclosure inventory could trend down to as low as 500,000 homes by year end which is very positive news for the housing market,” said Nallathambi.
Georgia, however, continues to suffer from a high number of foreclosures. Georgia rounded out the top five states that account for nearly half of all completed foreclosures in the nation.
Despite the positive data, August did see disappointing news in terms of new-home sales, according to the latest data by the U.S. Census Bureau and the Department of Housing and Urban Development. Sales of new single-family homes fell 2.4 percent in July. However, regionally, sales were up 8.1 percent in the South from the previous month and 33.2 percent from last year.
“We are somewhat surprised by this dip, considering builder confidence and new-home starts is on the rise,” said Kevin Kelly, chairman of the National Association of Home Builders. “However, builders are increasing their level of inventory in anticipation that sales will gradually improve during the rest of the year.”
The September Cal-Culator will be released October 7. We will reveal then if the momentum will continue into fall.