By Maria Saporta
At long last — some good news for metro Atlanta’s housing market.
After several years of significant oversupply, metro Atlanta now only has five months of inventory of homes that are on the market. That means that at the current pace of home sales, it would take five months to deplete the available inventory.
Atlanta-based Smart Numbers released its latest data at its semi-annual housing summit on Wednesday morning.
“A five month inventory is unprecedented,” said John Hunt, a senior analyst with Smart Numbers. “It is at a 12-year low. Even in our heyday of 2005 and 2006, we had a six to seven month supply, which is considered normal. This is what we’ve been waiting for.”
Smart Numbers actually pointed to several positive signs for an industry that has been as hard hit as any in the Atlanta region.
Rick Porter, owner and president of Richport Properties who has been building and selling homes in the Atlanta market for 34 years, said the market is beginning to “stabilize” after several rough years.
“What we are seeing across all product types and across the board is more movement in housing than we have seen in five years,” Porter said. “On the one hand, limited production in inventory has been painful, but that’s what laying the groundwork for recovery because the demand is coming back in a market with very limited supply.”
The region now is back up to making about 65,000 housing transactions on an annual basis, and there are about 30,000 housing units currently on the market, Porter said.
“Fourteen out of the last 15 months, sheer demand for housing has been up month to month. We’ve been able to burn through that mess of oversupply,” Hunt said. “It’s huge. When you’ve been so far down for so long, any sign of life is welcome.”
At the same time, the number of housing permits has increased.
“Permits are up, but not in a way that concerns me,” Hunt said. “They’re up in a way that’s consistent with demand.”
Part of the declining inventory and the increased demand for housing can be attributed to the fact that many homeowners have been unwilling to put their homes on the market because they do not believe it’s a good time to sell.
“That’s contributing to less inventory,” Hunt said. “But we are selling more homes as the market begins to recover. Prices have stabilized and inched up — partly because of a lack of inventory. I think we have overcorrected on our inventory.”
Interestingly enough, all residential types are showing signs of improvement.
“At their worst peak, condos were at a 17 month supply. Detached housing was at a 14 month supply,” Hunt said. “Now both are at five months.”
Because of all the foreclosures and because of difficulties related to buying and selling homes, Hunt said that there’s been a “massive shift” from home ownership to renters.
Prices still are far from their peaks. Hung said that of the homes that were sold in the last 12 months, about 25 percent were sold for less than $50,000.
And certain parts of the region are doing better than others. Of all the housing permits that have been issued in the first five months of 2012, nearly 72 percent of the activity occurred in four counties — Fulton, Cobb, Gwinnett and Forsyth.
By comparison, the bottom 10 counties — Newton, Jackson, Rockdale, Clayton, Carroll, Barrow, Fayette, Spalding, Walton and Dawson — accounted for only 5.6 percent of the housing permits in April.
For Porter, his company is now purchasing homes in closer-in neighborhoods, renovating them and selling them. He also has found that the first ring suburbs with homes that are about 50 years old have been a good place to buy, renovate and sell.
“People are making choices,” Porter said. “And location is more important than ever.”