A Stagnant Spring for Atlanta Real Estate
The Cal-Culator, Atlanta’s residential real estate index, has remained stagnant for the month of April. The index rose 0.1 in March to 7.1, where it will stay for another month. The Atlanta housing industry has been negatively affected by a lack of inventory, including hits to home prices and home sales, despite a receptive economy.
For the past few years, borrowers, sellers and buyers, and lenders have all been affected by the nation’s crippling short supply of homes. The Atlanta Board of Realtors’ latest housing report found supply was down 1.4 percent from the previous month, though new listings were up 8 percent from the previous year and an astounding 26.5 percent from the previous month. However, the supply for sales in Atlanta is barely over three months where six months is preferred. Total housing inventory for the U.S. is at a 4.5-month supply, up from 4.4 months in February.
The Wall Street Journal reported home builders’ outlook for single-family homes remains upbeat, despite choppy home sales. The latest monthly index from the National Association of Home Builders put sentiment at 58, matching the readings for February and March. Any reading above 50 is considered to be reflective of a good market.
“Builders remain cautiously optimistic about construction growth in 2016,” Robert Dietz, the NAHB chief economist, said in a statement. “Solid job creation and low mortgage interest rates will sustain continued gains in the single-family housing market in the months ahead.”
The South continues to lag behind national existing-home sale levels, according to the National Association of Realtors. Sales rose nationally 5.1 percent in March, but rose only 2.7 percent in the South. The share of first-time buyers remained unchanged.
“The choppiness in sales activity so far this year is directly related to the unevenness in the rate of new listings coming onto the market to replace what is, for the most part, being sold rather quickly,” said Lawrence Yun, NAR chief economist. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.
“After a long winter of strengthening home prices, the latest S&P/Case-Shiller Report shows hints of smaller monthly gains,” according to S&P Dow Jones Indices. The median home price in the South was up 4.6 percent from March 2015, as reported by NAR.
However, S&P said “the hint of slower growth shouldn’t alarm anyone; rather the biggest concern in housing today may be the small supply pushing prices higher.” Nationally, home prices are only 5 percent below the 2006 all-time high. However, Atlanta stands at 7.6 percent below the city’s highest 2006 peak.
Check back June 13 to see how inventory levels are affecting the Atlanta area when the next Cal-Culator is released.