The residential real estate market in Atlanta has been dampened, but then it was never a house-on-fire like some of the nation’s boomtowns.
not for price increases. Home values rose but did not soar simply because the supply of new homes — many aimed at first-time buyers — grew so fast.
“And because we never went up that much, we never have to come down that much,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
National prices on average are down 1.4 percent during the past year, according to an index calculated by MacroMarkets, a New Jersey-based consulting firm co-founded by economist Robert Shiller.
In contrast, Atlanta prices are up 1.7 percent during the past year — weakening but still positive.
Through the boom of the previous five years, prices in many regions had been swelling at double-digit rates. But in the year before last, the pace of increases for Atlanta had been about 5 percent, Dhawan said. “Five percent was not that great, and 2 percent is not that bad.”
Still, the story is far from over.
Sales in June were about 30 percent lower in metro Atlanta than they were a year earlier and there is no evidence that demand has bottomed out. Many builders have been slow to adjust to slackening demand, continuing to build where they had already bought land and obtained permits.
The result is a buyer’s market, with homes for sale representing more than 10 months worth of backlog.
Sales could be further chilled if banks tighten up on lending or if potential buyers pull back to see if prices come down. But mortgage rates have not moved up much — and in recent weeks, they’ve dipped slightly, according to the Mortgage Bankers Association.
For Georgia, a 30-year mortgage is available for 6 percent to 6.50 percent, according to Bankrate.com.
By Michael Kanell, The Atlanta Journal-Constitution