*Reprinted from Atlanta Business Chronicle, July 29, 2016
Atlanta’s residential real estate market was booming in during the first half of 2016 but “the gridlock of inventory is the issue to watch” looking forward to the second half of the year.
Atlanta-based Dorsey Alston, Realtors reported home and condominium prices in Intown Atlanta (Ansley Park, Virginia-Highland, Morningside and Midtown) are up substantially over this time last year, while the number of listings is up across metro Atlanta.
Intown single family saw a marked increase in number of units on the market, up 19 percent, and experienced an 11 percent increase in average sold price to $710,624. Further evidence the condominium market is heating up, the increase in new intown listings was up 4 percent year-to-year, but the average sales price soared to a 23 percent increase, according to the company.
“The Intown market is strong,” Dorsey Alston broker Patrick Wood said in a statement. “It’s where people want to be, and because of the high-barrier-to-entry we haven’t seen as much new product delivered as in other areas.”
Dorsey Alston noted Brookhaven saw the average sold home price increase by 15 percent, while the number of listings coming on the market were up. Barely trailing Brookhaven is North Fulton, which includes Alpharetta, Roswell, Milton and Johns Creek. Those cities saw a 10 percent jump in average closed home price to $475,424, while the number of new listings is up 12 percent. East Cobb also saw an uptick in number of homes on the market while the average sales price climbed 4 percent over this time last year.
In just about every section of the metro area the number of new listings is up as homeowners look to take advantage of the climbing numbers. Sellers need to temper their expectations, however. While there are increases in home prices nearly across the board, in many cases the houses are selling for below their list price, the company added.
Alpharetta, Ga.-based RE/MAX of Georgia reported the median price for all homes sold during the first 6 months of 2016 was $219,100, which is 5 percent more than the median price of homes sold during that same period in 2015.
The company said the first 6 months of 2016 saw an 11 percent decrease in the number of closed transactions over sales during that same period in 2015 while the average days on the market for all homes sold in the first 6 months of 2016 was 56, which is 8 days less than the average the first 6 months of 2015.
The average number of months supply of inventory in the first 6 months of 2016 was 2.8, which is a 15 percent drop from the same period in 2015.
RE/MAX of Georgia Senior Vice President Jeanette Schneider said we are definitely seeing the impact that the tight supply of homes is having on the market.
“A normal market would have a 6-month supply of homes and right now we have about a 2.8-month supply,” she said in a statement. “The lack of inventory needed has helped push home prices up while closed sales have dipped from last year.”
Schneider noted the good news for sellers is home values are rising and most can anticipate moving their home quickly once it is on the market and at favorable price.
“One segment of the market that isn’t tracking for quick sales is the luxury market – homes that are priced at $500k or more,” she said. “Activity in that market is slower overall with fewer active buyers and homes sitting on the market longer.”
Looking forward, Schneider said the gridlock of inventory is the issue to watch as current homeowners are choosing not to put their home on the market due to concerns they won’t be able to find a home to move into when theirs sells quickly or since prices have increased they can no longer afford the move-up home in their current area.
“Overall we anticipate the second half of 2016 will see similar market conditions,” she said. “Interest rates will remain near where they are now and buyer demand will keep prices slowly moving upward. July activity has been strong and suggests a solid start to the second half of the year.”