Metro Atlanta housing market unbalanced and cooling, experts say

Home sales are down, but prices are up in metro Atlanta, according to a highly watched national report issued Tuesday.

Area home prices last month, on average, were up 0.3 percent, half as much as the month before, according to the S&P CoreLogic Case-Shiller Indices.

Over the past year, Atlanta home prices are up 5.3 percent.

Driving that increase has been an unbalanced market, which has generally been shifting toward the advantage of sellers, said Svenja Gudell, chief economist for Zillow, an online real estate data company. “The U.S. housing market entered a strange kind of twilight zone over the summer, in which home prices kept rising steadily, but actual home sales activity largely leveled off at fairly underwhelming levels.”

If you just look at prices, you don’t get the full picture, Gudell said.

“It sets up a situation in which the housing market looks largely healthy from a 50,000-foot view,” she said.

There are still a lot of people looking for homes, but many of them are first-time buyers, angling for lower-priced houses. And the supply of lower-priced houses listed for sale is limited, meaning many of those potential buyers come away empty-handed.

The shortfall in supply has been caused by insufficient homebuilding, Gudell said.

“It’s time we stopped sugarcoating the truth with this data — the simple fact is that we are severely under-producing housing in this country. Inventory is stuck at roughly mid-1990s levels, but the country has grown by more than 60 million people since then.”

Even so, Atlanta’s prices are not rising as fast as they were. And among the nation’s largest metro areas, Atlanta has continued to slide lower on the list for home price growth.

The 20 largest metros have seen a 5.8 percent increase in prices. Among those, 14 had faster rates of growth than Atlanta, according to Case-Shiller.

The fastest price increases came in Seattle, where home prices spiked 13.5 percent on average during the past year. Second-fastest growth was Portland, Ore. where prices were up 7.6 percent.

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said there are some signs of ebbing energy in the housing market.

“While home prices continue to rise, other housing indicators may be leveling off,” he said. “Sales of both new and existing homes have slipped since last March.”

Another crucial indicator of consumer finances are auto sales, he said. “Auto sales peaked last November and have been flat to slightly lower since.”

The market in coming months will face challenges, he said. One is the need to rebuild housing destroyed by hurricanes in Florida and Texas, the other are the Federal Reserve’s moves that will likely push mortgage rates higher.


AJC Business reporter Michael E. Kanell keeps you updated on the latest news about jobs, housing and consumer issues in metro Atlanta and beyond. You'll find more on, including these stories:

Never miss a minute of what's happening in local business news. Subscribe to 

Reader Comments ...

Next Up in Business

UPS holds job fair for new hub on westside of Atlanta
UPS holds job fair for new hub on westside of Atlanta

Hundreds of job seekers attended a UPS job fair Saturday seeking work as part-time package handlers at a new regional UPS hub to open on the westside of Atlanta. About 400 people pre-registered for the job fair at the Andrew & Walter Young Family YMCA, and more came as walk-ins. The job fair was scheduled to run through 3 p.m. Saturday. Phyllis...
Cyber security fears spark training, hopes for lots of Georgia jobs
Cyber security fears spark training, hopes for lots of Georgia jobs

Even Georgia’s first lady worries about cyber attacks. “I keep telling her that’s not going to happen; we don’t have enough money for them to fool with,” Gov. Nathan Deal quipped before cutting the ribbon on the new $100 million Georgia Cyber Center in Augusta the other day. He fished out his pocketknife when giant ceremonial...
Three Atlanta sports teams suspend Papa John’s affiliation
Three Atlanta sports teams suspend Papa John’s affiliation

Three Atlanta sports teams are reevaluating their partnerships with Papa John’s after the company’s founder admitted to using racist language.   The Atlanta Falcons and Atlanta United suspended their relationship with Papa John’s Pizza following reports John Schnatter used a racial slur during a conference call in May, a...
Toy stores, makers face life after Toys ‘R’ Us
Toy stores, makers face life after Toys ‘R’ Us

Buckhead-based toy store Kazoo Toys knows what its customers want. In fact, customers sometimes even call ahead, ownder Joe Novak said, telling Kazoo information about a child they are buying a present for. When the person arrives, the employees can have a product already picked out and wrapped. “There is a passion in local toy store owners you...
Atlanta real estate: Home prices rise strongly
Atlanta real estate: Home prices rise strongly

Home prices continued their long rise as summer began, according to a report the Atlanta Realtors Association. The median price of a home sold in metro Atlanta during June was $285,000 – a jump of 7.5 percent from the same month a year ago, the group said. Higher prices are a sign of strong demand, said Bill Murray, president of the Atlanta Realtors...
More Stories