Strong December Cal-Culator Shows Promise for 2014
After a bitterly cold winter in Atlanta, both in temperature and in the housing industry, things are beginning to thaw. Last month, The Cal-Culator rose 0.1 to a 5.1, from October’s record low of 5.0. The December Cal-Culator jumps to a 5.5 and closes 2013 on a positive note. Rising home prices, fewer distressed sales, increased inventory and rising number of home sales all contribute to Atlanta’s road to recovery into the New Year.
One of the defining characteristics of the Atlanta residential real estate market in 2013 was the housing inventory crunch. Luckily, the past few months have offered relief for hopeful homebuyers locally and nationally. The December Case-Shiller Index reported that listing inventory in Atlanta was up 21.4 percent from February 2012. The inventory of national homes for sale in November was up 5 percent from the previous year, the first year-over-year gain in inventory since early 2011, according to The Wall Street Journal.
“We saw an extended period of low inventory late last year and early in 2013. But the recent trend is rising and we appear headed for a more normal level of inventory for next spring,” reported Atlanta Real Estate Scoop. “Buyer activity remains strong led by baby boomers and first-time buyers.”
Home prices, an indicator of a strong housing industry, steadily increased in the last quarter of 2013. A Clear Capital Home Data Index Market Report indicated that national home prices rose from 10.9 percent from 2012 while Atlanta saw home prices rise 13.6 percent over the past year, as reported in the latest Case-Shiller Index.
The rise can partially be attributed to buyers holding out to sell their homes for more than their appraisal value and fewer foreclosures on the market, according to Atlanta INtown, “Market Watch: A real estate forecast for 2014.”
As home prices are rising, so are new home sales data. The Commerce Department’s new-home sales reports for November reported that sales were up nearly 17 percent from November 2012, making it of the strongest months of new home sales since 2008. However, overall sales decreased – but for a good reason!
“While existing and pending home sales have slipped in recent months, distressed sales – foreclosures and short sales – account for much of the drop,” said Jed Kolko, chief economist for Trulia. “The mix of sales continues to shift from distressed to non-distressed, which is a sign of market recovery.”
Construction starts for homes are also seeing double-digit gains. The U.S. Census Bureau reported that November saw a 20.8 percent increase, amounting to a seasonally adjusted annual rate of 727,000, for single-family homes from October.
Economists believe that these trends will likely carry over into the New Year as buyers are continuing to take advantage of historically low mortgage rates and home prices. Check back for the next Cal-Culator on Feb. 11 to see how 2014 is faring.