Atlanta real estate continues to send mixed signals with home values declining for the overall Metro Atlanta market while certain areas on the north side of the city realizing small, but steady price appreciation. The driving factors continue to be constrictions in lending guidelines and high supply.
The absorption rate for Metro Atlanta is 13 months supply of homes. Year over year closed sales are down about 36% with an average price of $240,100 which is down 8.5% from this time in 2007 and also lower than 2005 or 2006. It would be easy to look at these numbers and see gloom and doom, but, it’s important to look deeper at the market to get a better sense of what is really happening.
In a previous post here, I wrote about the importance of looking at hyper local statistics, but, broad statistics are essential for comparing what is happening in the smaller markets.
However, they don’t tell the whole story.
Some areas within the city are skewing the numbers down considerably so on its face the whole Atlanta real estate market appears to be in bad shape when that is not entirely the case.
Worst hit has been the condo market. We have had 6 consecutive months with a year-to-year percentage decline of 20% or more for condos & townhomes of closed sales and prices continue to drop due to the high supply.
Other areas saw an unusually high amount of mortgage fraud, too much regentrification with overheated appreciation and when combined with the lending constrictions brought many of these, mostly in-town neighborhoods to a screeching halt.
Finally, new construction has taken a hit here as it has in many other parts of the country. Even maintaining the highest growth in population of any major city in the country has not been enough to stop the confluence of events that swept the nation, and builders, in their tracks. Builders have held out as long as possible without lowering prices hoping for a turn in the market, but they are finally being forced to accept that for the inventory to move, prices must come down.
I actually just put a $1,150,000 new construction home under contract for $798,000 so I suppose it could be said that there are some relative bargains in the high end market for those who can afford it and we should be seeing more builders face the facts as the market has presented itself.
I anticipate further declines in prices for this segment of the market.
On the other hand, the north side of Metro Atlanta, and the northern cities in particular, continue to appreciate in value even with a 30% reduction in overall closed sales. Here again, a number of factors contribute to the anomaly on the north side. Above average schools, lower crime and lower unemployment (in the 3%’s compared to Metro Atlanta’s 5.8%) continue to make the northern cities of Alpharetta, Roswell, John’s Creek, Milton and Sandy Springs outperform the market as a whole.
We are no longer seeing appreciation in the 7%-10% range of a few years ago, but, 2%-3% appreciation should be considered excellent relative to the surrounding market.
If you are interested in learning more specific information about the Atlanta real estate market, please don’t hesitate to contact me at 404.630.3187 and visit my website at www.ryanwardrealestate.com.
Ryan Ward, The Ryan Ward Group, Keller Williams Realty Consultants
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