Metro Atlanta’s housing market its fifth consecutive year of solid gains last year, but the shrinking supply in homes for sale has continued to drop into the red zone, according to a report by Re/Max.
The median sales price of a ho me sold last year was $239,000 – up 6 percent from 2016.
Rising prices are likely to push buyers – especially first-time buyers — deeper into the suburbs this year, said John Rainey, vice president of Re/Max Georgia. “Looking ahead, we expect to see changes in buying patterns this year, as buyers begin to look to communities further outside of Atlanta in search of more affordable housing and a wider selection.”
Among the region’s core counties, Fulton had the highest priced sales, a median of $332,500 during the year – more than twice the median price of a home sold in Clayton County.
Clayton, which suffered more concentrated pain than any other county during the crash of real estate and the recession that followed. With more ground to make up, Clayton is also bouncing back a little faster than its neighbors to the north.
The sales prices in Clayton last year were up a robust 9 percent from the year before – a stronger increase than the other core counties.
However, Gwinnett had the most active market: during 2017, the county had 12,158 homes sold, according to Re/Max.
As healthy as it all sounds, the market has a problem that has continued to worsen: inventory – that is, the number of homes listed for sale. One of the reasons that prices have been steadily climbing is that the balance has shifted to sellers – there are more buyers looking than homes listed for sale.
Inventory is measured by the number of months of sales it would take to soak up the listings. In a healthy, balanced market, inventory generally represents six or seven months of sales.
That number has been a problem for a while. It already didn’t look good in 2016 – it was about half what experts say is healthy.
And it got a lot worse last year, dropping 12 percent to was 3.0 months, said Re/Max.
That is, if you have a home to sell, pretty good news. But it means many buyers will be competing against each other and that prices will keep rising.
The buyer-seller balance does differ by area and even by neighborhood.
The fundamentals of the metro Atlanta economy have been solid. What worries economists is that the increases have been consistently outpacing the rise in wages for most Atlantans. Which means that residents will spend more of their income on housing, buy much more modest homes or – as Rainey suggested – move farther away to find less costly options.
And experts say the overall market depends on first-time homebuyers. If they are priced out of the market, that makes it harder for the previous wave of first-timers to sell their own homes and “move up.”
The trend is not likely to change soon, Rainey predicted. “Inventory will continue to impact the market until we see a rise in new home construction – particularly entry-level houses that meet Atlanta’s rising demand for affordable housing.”
The balance, of course, could get worse if Amazon chooses Atlanta for its new headquarters and tens of thousands of newcomers arrive in need of housing.
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Median price of homes sold during 2017
Source: Re/Max Georgia
Number of homes sold, by county during 2017:
Source: Re/Max Georgia