Atlanta Residential Real Estate: Poised for Massive Recovery
The first Atlanta residential real estate index of 2015 positions this year to be one of the most memorable years for the Atlanta housing industry in recent history. Strong employment, a growing economy, new government legislation, and an increase in new and existing home sales contributed to the Cal-Culator’s 0.3 increase to a 6.3 in January.
When employment and the economy are on the rise, housing almost always follows suit. The U.S. experienced nearly 4 percent economic growth in the latter half of 2014 with employment gains of over 250,000 per month, according to National Mortgage Professional Magazine. For the first time in eight years, Georgia saw job growth during the month of December. It appears that Federal Reserve Chairwoman, Janet Yellen, was accurate when she predicted 2015 would be “the year of normalcy” with the economy and labor force returning to normal for the first time since the Great Recession.
The latest data from the National Association of Home Builders revealed that sales of new, single-family homes rose a staggering 11.6 percent in December nationwide and 17.7 percent in the South. NAHB experts have noticed more serious buyers in the market and are expecting the trend to continue into the New Year.
“After a slow start to 2014 precipitated by bad weather conditions, new home sales have ramped up in the second half of the year,” said NAHB Chief Economist David Crowe. “We can expect this momentum to continue into 2015 with the release of pent-up demand, particularly as existing home owners are trading up.”
Existing-home sales also bounced back in December by rising 2.4 percent after a dip in November, according to the National Association of Realtors. NAR also agreed that 2014 got off to a slow start in the housing industry, but 2015 is primed for massive recovery.
“Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated,” said NAR Chief Economist Lawrence Yun. “Sales were measurably better in the second half – up 8 percent compared to the first six months of the year.”
Another factor that is expected to affect the housing industry well into 2015 is decreased FHA insurance premiums that will lower annual insurance premiums and incentivize families to purchase homes. In January, President Obama announced that the Federal Housing Authority would reduce insurance premiums from 1.35 percent to 0.85 percent.
According to President Obama, this change could save millions of families “as much as $900 a year, which obviously makes a big difference if their payment is $900 a month. It could be a full month’s payment that they’re saving, and that could make all the difference for a family that is owning its first home.”
The next Cal-Culator will be released March 10. Stay tuned for the latest updates on the housing industry, the U.S. economy, and whether we’ll continue headed toward the first “year of normalcy.”