Home prices rise 5.4 percent in metro Atlanta over past year: Case-Shiller index

By David Pendered

Prices of homes sold in metro Atlanta rose by 5.4 percent during a 12-month period ending in June, according to the Case-Shiller index released Tuesday. The results help offset values lost in the ongoing stock market plunge.

Housing starts, Atlanta

Pulte Homes is developing Stonehill at Lenox, a community of 3-story townhomes to be priced from the low $500,000s. Credit: pulte.com

Nationally, the S&P/Case-Shiller Home Price Indices showed an increase of 4.5 percent in the 12-month period ending in June. That’s an increase from the 4.4 percent increase the index showed for the 12-month period ending in May.

The growth rates for other cities in the south include:

  • Charlotte – 5.2 percent;
  • Dallas – 8.2 percent;
  • Miami – 7.7 percent;
  • Tampa – 5.4 percent.

The cities with the highest gains, among the 20 cities tracked by the index, are:

  • Denver – 10.2 percent;
  • San Francisco – 9.5 percent;

    Case-Shiller index, August 2015

    The Case-Shiller index of home prices showed a continued improvement of 4.5 percent nationwide, and 5.4 percent in metro Atlanta. Credit: spice-indices.com

  • Dallas – 8.2 percent.

The price increase in Atlanta continues an upward trend that began in March 2012. At that time, the Case-Shiller price index for metro Atlanta was 82.54. That was the lowest level since August 1996, according to the index measures the average change in value of residential real estate in Atlanta given a constant level of quality, according to its website.

That said, the Case-Shiller report noted that, as of June 2015, average home prices in the index have risen to their levels in winter 2005. Furthermore, “Measured from their June/July 2006 peaks, the peak-to-current decline for both [10-city and 20-city composites] is approximately 12 to 14 percent. Since the March 2012 lows, the 10-city and 20-city composites have recovered 33.8 percent and 34.9 percent.”

Metro Atlanta is located in the 20-county index.

The analysis of the index noted that home prices continue to outperform inflation, rising at 4 percent to 5 percent while hovers below 2 percent.

This Case-Shiller chart shows that home prices have regained their level of winter 2005. Credit: spice-indices.com

This Case-Shiller chart shows that home prices have regained their level of winter 2005. Credit: spice-indices.com

The analysis also notes that a stock market correction isn’t likely to affect the housing market, until the correction reaches more than 20 percent.

This is the complete analysis, provided by David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices:

  • “Nationally, home prices continue to rise at a 4 to 5 percent annual rate, two to three times the rate of inflation.
  • “While prices in San Francisco and Denver are rising far faster than those in Washington DC, New York, or Cleveland, the city-to-city price patterns are little changed in the last year. Washington saw the smallest year-over-year gains in five of the last six months; San Francisco and Denver ranked either first or second of all cities in the last five months.
  • “The price gains have been consistent as the unemployment rate declined with steady inflation and an unchanged Fed policy.

    Case Shiller, 12-month, August 2015

    This chart shows value increases in the 20-city composite tracked by the Case-Shiller index. Credit spice-indices.com

  • “The missing piece in the housing picture has been housing starts and sales. These have changed for the better in the last few months. Sales of existing homes reached 5.6 million at annual rates in July, the strongest figure since 2007.
  • “Housing starts topped 1.2 million units at annual rates with almost two-thirds of the total in single family homes. Sales of new homes are also trending higher. These data point to a stronger housing sector to support the economy.
  • “Two possible clouds on the horizon are a possible Fed rate increase and volatility in the stock market. A one quarter-point increase in the Fed funds rate won’t derail housing.
  • “However, if the Fed were to quickly follow that initial move with one or two more rate increases, housing and home prices might suffer.
  • “A stock market correction is unlikely to do much damage to the housing market; a full blown bear market dropping more than 20 percent would present some difficulties for housing and for other economic sectors.”

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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