Wednesday, April 29, 2015 / by David Monroe
As the housing market cruises through the critical spring season, a closely-watched report shows average home prices continuing to rise — though at a slower rate than during the past few years.
Average home prices in metro Atlanta in February gained 5.6 percent from a year earlier, according to the S&P/Case-Shiller Home Price Index.
“It seems to be across the board,” said Greg Kurzner, president of the Kurzner Group in Alpharetta. “There is a lot of demand and a lot of activity.”
Metro Atlanta prices edged up 0.1 percent from January to February, according to Case-Shiller. However, the report’s data was collected before the couple of months in late spring that are key.
“You always see a lot of activity in spring and summer,” Kurzner said. “You should see it peak around July.”
As prices have increased, the pace of the climb has slowed: In February 2014, prices were up 16.1 percent year-over-year.
One driver of rising prices is low inventory, as would-be sellers remain hamstrung by the job market or are simply less interested in move-ups and big new mortgages in the wake of the housing bust. Some who bought at the peak remain “underwater,” owing more than their homes are worth.
“I am a little concerned that the lack of inventory could constrain growth,” Kurzner said.
Inventory — that is, homes listed for sale — now represent less than three months of sales, said Jeanette Schneider, senior vice president and broker at RE/MAX Regional Services. “That is a low number, very low.”
Nationally, the home price average rose 4.2 in February from a year earlier. The composite for the largest 20 metro areas rose 5.0 percent. Metro Atlanta’s growth ranked 10th among that group.
“We are right in the middle of the pack,” Schneider said. “And I’m okay with that. I think it signals that we are having a healthy, managed growth.”
The biggest price growth came in Denver, at 10 percent, followed by San Francisco at 9.8 percent.
“Home prices continue to rise and outpace both inflation and wage gains,” said David M. Blitzer, chairman of the S&P Committee that oversees the Case-Shiller research.
Only Denver and Dallas have rebounded beyond the price peaks of the housing boom, he said. “If a complete recovery means new highs all around, we’re not there yet.”
Prices crested in July 2006 nationally, although in metro Atlanta they kept climbing for nearly another year. After that, average Atlanta prices plunged about 40 percent.
Housing prices hit bottom in March 2012. Despite big gains since then, progress is uneven, with some areas still in a housing depression.
Overall, Atlanta values are back to levels of late 2003 or early 2004, according to Skylar Olsen, senior economist with Zillow Real Estate Research.
They remain about 13 percent below peak, compared with 10 percent below nationally.
Home prices over the next year should rise about 4 percent, Olsen said. At that pace, the market will not climb past its pre-recession peak until late 2018, but will do it without dangerous bubbles, she said.
“We expect Atlanta to return to normal home value appreciation levels.”