Metro Atlanta home prices have climbed back to the highest point in 18 months, as inventory drops and more buyers hit the market.
Prices rose 16.5 percent in February from a year earlier, according to the S&P/Case-Shiller home price index, a widely watched barometer. The latest report was released Tuesday.
Atlanta’s Case-Shiller index score has not been higher since August 2011, when the effect of foreclosures and a weak economy sent prices into a trough that bottomed out last February. Since then the index has slowly improved.
The rebound means metro Atlanta’s housing market will become more normal soon, said James Marks, the Atlanta managing broker for RedFin, with fewer people owing more than their home is worth. That will prod more to sell, and also keep boosting the number of buyers, he said.
“It’s a good sign,” Marks said. “The demand’s there, and prices are up.”
Atlanta had the fourth highest year-over-year gain among 20 cities tracked in the monthly index.
Still, Atlanta joins Detroit and Cleveland as the only metro areas that still have average sale prices below where they were in 2000 — the baseline year for the index. And Atlanta values remain about 29 percent off the peak of mid-2007, according to the index.
The value of Judith Courtney’s Brookhaven home is now slightly above where it was when she bought it in 1998, she said.
If prices had risen further, Courtney said, she might have moved to a smaller townhouse when her children moved out. But she’s holding on to a home that’s too big for her while waiting for the price to get higher.
“It’s not what we had anticipated,” she said. “It’s kind of depressing, mood-wise.”
Charlene Williams, who bought her Tucker home in 2010, said she’s unlikely to trust a home as an investment anymore.
While rising values boost her confidence in the economy, Williams said her house is still likely worth $40,000 less than when she bought it.
The February year-over-year gain was the biggest for metro Atlanta since 1992. It followed a 13.5 percent jump in January and a nearly 10 percent gain in December. But that trendline mostly reflects falling prices in late 2011 and early 2012.
The latest price number for the region is still 3.6 percent lower than in February 2011.
Of late, prices have been increasing slowly month-to- month — up 1.1 percent from December to January and not at all from January to February.
February prices were equivalent to those in 1999, according to the Case-Shiller index. At the bottom of the trough last year, prices had fallen to mid-1996 levels.
Some of the improvement of recent months stems from a foreclosure crisis that seems to be waning, said David Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices, which publishes the report.
Foreclosure sales pull down average prices.
“The damage done by the housing collapse was very substantial,” Blitzer said.
Blitzer said he expects metro Atlanta’s large year-over-year increases to shrink because of better year-ago numbers.
For all 20 cities, the Case-Shiller index rose 9.3 percent in February. Phoenix, with a 23 percent year-over-year increase, saw the greatest jump.
“We’re gradually returning to a normal market,” Blitzer said. “Some months will go up a bit and some months will go down a bit. There will be hot neighborhoods and cold neighborhoods.”
That’s already the case, said Julie Sadlier, a Realtor with RE/MAX Metro Atlanta Cityside. In Atlanta’s Virginia Highland and Morningside neighborhoods, she said, prices are back to 2007 levels. Newly listed homes are getting offers before the week is out, and people are sometimes bidding above the asking price.
Marks, with RedFin, is seeing the same thing as the number of houses on the market stays low. He does not think such large year-over-year increases are sustainable.
“It’s a challenge for buyers,” he said. “When you do find what you want, there are eight other people who want it, too. Then you’re paying top dollar.”
How home prices have changed across the U.S.
Jackie Benveniste recently checked the value of her Sandy Springs home. It was worth $40,000 more than the last time she looked.
The retired banker said the rising numbers change her outlook.
“It feels more secure for me to spend money,” she said. “I’m fixing stuff.”
Benveniste said she has more confidence. She’s going to the mall a little more often, and she plans to spend money on landscaping and other projects. She’s noticed neighbors are doing home improvement projects, too.
Her friend and neighbor Lynn Simon has noticed more “for sale” signs in their neighborhood.
“They’re just all of a sudden popping up,” she said.