Red, White and Stagnant – The July Atlanta Cal-Culator
Amid the exhilarating fireworks on the Fourth of July, the Atlanta real estate housing industry proved somewhat less thrilling remaining stagnant for the month. Although the Cal-Culator rose to a record high last month to 6.7, indicators reveal it will stay put for another month. Many housing indicators remained stagnant, or showed little to no improvement, such as housing inventory and home prices, while sales and builder confidence picked up the slack.
The latest data from S&P/Case-Shiller Home Price Indices indicates home prices have been on the rise for the past year. Home prices in the 20-City Composite, where Atlanta resides, gained 4.9 percent year-over-year. However, prices only rose marginally month-over-month before seasonal adjustment and declined 0.2 percent after seasonal adjustment.
“Nationally, single family home price increases have settled into a steady 4%-5% annual pace following the double-digit bubbly pattern of 2013. Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate. Prices are increasing about twice as fast as inflation or wages,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
Home Sales and Inventory
Home sales continue to remain solid in Atlanta, considering the inventory. Home sales jumped 17.6 percent from June 2014 and increased 8.5 percent from the previous month, according to the latest data released by the Georgia Multiple Listing Service as reported by The Atlanta Journal-Constitution.
According to MLS, inventory in Georgia is up slightly from May, but down 9.1 percent from the inventory level of June 2014. Though June is one of the strongest real estate months of the year, Georgia inventory is barely at four months, whereas a minimum of six months is considered healthy.
“Finding a house is the last hurdle for many buyers who have saved a down payment and gotten pre-approved for a mortgage. But low inventory levels like those we’re seeing across the country can bring the home-buying process to a screeching halt,” said Humphries. “In many markets, there just isn’t a lot to choose from in terms of homes on the market.”
One of the brightest spots for the month shows U.S. homebuilder confidence on the rise. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) made headlines when it announced builder sentiment hit a nearly decade high in July. Builder confidence in the market for new, single-family homes hit a level of 60 last month – a level not reached since 2005. Indexes that gauge current sales conditions and sales expectations also rose.
“The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace,” said NAHB Chairman Tom Woods. “As we head into the second half of 2015, we should expect a continued recovery of the housing market.”
The next SaportaReport will be released September 8 and will hopefully yield better news regarding inventory and home prices, while continuing to provide positive news on home sales and builder confidence.