Atlanta’s home prices rose 5.3 percent during the past year, slightly better than the gain in most large metro areas, according to a much-watched national survey released Tuesday.
Atlanta beat the 5.1 percent average increase for the top 20 metropolitan areas, according to the S&P/Case-Shiller House Price Index, a calculation based on a three-month average.
For the most recent month, metro Atlanta prices were up 0.2 percent, compared to the 20-metro average of 0.1 percent.
However, when adjusted for seasonal patterns, Atlanta looked a lot stronger, rising 0.7 percent, according to Case-Shiller. That tied metro Atlanta for the third-fastest price hikes, behind Tampa and Dallas.
Gains in Atlanta have been uneven, however. Some areas have barely limped out of the recession, said Debra Bradley, managing broker for Buckhead West Paces office of Coldwell Banker.
“Because every market is different,” she said. “What is typical in zip code 30305 in Buckhead is going to be different than what is typical in 30040 in Forsyth County, Cumming.”
Both in Atlanta and nationally, price gains may be reaching an inflection point, said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Atlanta prices are still 2.6 percent below pre-recession peaks, while the national index for prices has finally come back to hit its pre-recession peak, said Blitzer.
“The new peak …. will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance,” he said. “Sales of existing and new homes are rising and housing starts at an annual rate of 1.3 million units are at a post-recession peak.”
However, average prices are not proof of health, cautioned Svenja Gudell, chief economist for Zillow, a Seattle-based firm that collects and analyzes housing data.
“It isn’t smart to confuse this full recovery in housing prices with a full recovery in the housing market overall,” she said. “Big imbalances still exist between renters and homeowners, and home buyers and home sellers, and there’s still a long way to go before the market reaches full equilibrium.”
The Case-Shiller index for national prices hit its pre-recession high in July 2006. The Atlanta index crested a year later.
After sliding for five years, the Atlanta market started climbing in 2012. Since then, Atlanta’s average has increased 61 percent. Yet that still leaves Atlanta prices 2.6 percent below that 2007 peak.
The median price of a home sale in metro Atlanta is now $230,000, according to a recent report from Atlanta Realtors, the local group’s association.
Among the 20 largest metro home markets, average prices in Seattle saw prices rise most rapidly: up 11.1 percent in the past year. Average prices in Portland, Ore. were close behind at 10.9 percent during the year. Denver saw a price hike of 8.7 percent.
Slowest growth was in New York, where average prices edged up 1.8 percent; Washington, D.C., where prices were 2.7 percent higher; and Cleveland, which was up 3.0 percent on the year.
Among the top 20 metros, Atlanta is tied for 12th-fastest growing, according to Case-Shiller.
Atlanta was one of the strongest markets during the housing bubble and burst more painfully than most, suffering an estimated quarter-million foreclosures.
Progress in Atlanta and nationally have been steady since the housing market hit bottom in 2012. The nation’s foreclosure rate has fallen to its lowest point since January of 2005, according to Black Knight, a financial services company.
Metro Atlanta foreclosures have likewise dropped, but much damage remains. In some areas, a high share of homes are still “underwater” – that is, worth less than the owner owes on the mortgage.
Whatever the average may show, local experts caution against painting with a broad brush.
At the lower end of the price ladder prices, there is a shortage of homes for sale and prices are rising. But there is something of a surplus of homes for sale at the top end of the market.
“A couple months ago, we started to see some pretty serious price reductions across the board,” said Nancy Keenan, a Realtor with Keller Williams who handles mostly listings on the north side of town.
“Some people are behind the curve,” she said, of the higher priced homes. “They missed height of the market and now they are dropping, dropping, dropping.”
Zillow Chief Economist, Dr. Svenja Gudell:
“The U.S. National Case-Shiller home price index has essentially re-gained all losses sustained during the housing bust and is at, above or very near peak levels in many markets. But it isn’t smart to confuse this full recovery in housing prices with a full recovery in the housing market overall.
“Big imbalances still exist between renters and homeowners, and home buyers and home sellers, and there’s still a long way to go before the market reaches full equilibrium.
“But there are promising signs on the horizon. Rental growth is slowing down, and coupled with rising incomes, 2017 looks to be the year in which the trend of worsening rental affordability reverses.
“Inadequate supply of homes available to buy – especially at the entry-level end of the market – remains a huge problem. But it has to improve eventually. And in the meantime, buyers are still out there in droves despite the headwinds – especially younger buyers that will form the backbone of the housing market for years to come.”
HOME PRICE GAINS
September gains year-over-year for selected metros, nation:
Portland, Ore., 10.9%
Washington DC, 2.7%
New York, 1.8%