Market still tilted in favor of sellers; many remain underwater.
By Michael E. Kanell email@example.com
It’s been a consistent theme for months. The long march toward recovery for metro Atlanta’s housing market continued last month as a shortage of homes for sale caused prices to rise and sales to lag. The number of single-family home sales was down 1.2 percent in June from a year ago and 4 percent from May, according to Monday’s report by the Atlanta Board of Realtors.
Crucially, June saw 16,192 homes for sale in the 11-county metro region, which is equal to 4.4 months of sales. That is still several months shy of what is considered a normal supply, so the market remains tilted in favor of sellers.
“That is the biggest factor in the number of sales and the increase of prices,” said William Golden, Realtor with ReMax Metro Atlanta. “Almost every single sale I’ve had this year has had multiple offers.” That drives up prices. The median price of a home climbed 10.6 percent from June 2013 to reach $230,000 in the 11-county area. “I think we are still heading back toward normal,” Golden said.
Seven years after the housing bubble burst in Atlanta and the plunge in both real estate values and sales, the market has been coming back. A slowly improving economy has reassured many consumers about their finances, convincing some to buy their first home and others it’s time move up to a more desirable place. Yet, the pool of sellers has not grown as fast.
So when Nan Pinner went looking for a house this spring, she saw she couldn’t dawdle. “I realized really quickly that if I liked a house and the neighborhood, I needed to be ready to make an offer and put down some ‘earnest’ money,” she said. “I just did everything I could do to make it happen.” She selected a house in Cobb County, made an offer that was accepted, got a loan and could have closed on the deal within three weeks if she hadn’t been on a business trip. Instead, it was a week later. She moved in Friday. “Everybody says it’s a seller’s market, but getting the interest rate I did and having the process so smooth and easy, I felt it was good for me, too,” she said. “I thought I got an excellent deal.”
Todd Emerson, president of the Atlanta Board of Realtors, said the group is “very optimistic in regards to the outlook for the second half of 2014.” But while sellers maintain the upper hand, some homeowners are still reluctant to put their houses on the market. According to some estimates, more than one-third of metro Atlanta mortgages are still “underwater” — that is, the value of their home has not yet risen enough to let them pay off what they owe on their mortgage with a sale. Moreover, many sellers need to do better than break even. They must walk away from the sale with cash to use as a down-payment on another house, said Dan Smith, president of PrivatePlus Mortgage, a division of Private Bank of Buckhead.
“There are still a lot of people without the 20 percent equity they need to buy that next house,” Smith said.
Other homeowners refinanced when mortgage rates were at record lows, so they could face higher monthly payments if they sell their home now and buy another one that would be financed at higher rates, he said.
But as long as prices keep rising, sellers will have more incentives to put their homes on the market in the future, Smith said. That could mean more sales and a moderation of the double-digit price increases that have been common of late. “This is still a market in transition,” he said.
WHY IT MATTERS
Home sales and values are important even to people who aren’t likely to sell or buy anytime soon. The state of the housing market contributes to the so-called“wealth effect”that helps drive the broader economy by making consumers either more bullish or less confident about purchases of all types.
ATLANTA REAL ESTATE
Highlights from the latest 11-county report on metro Atlanta’s housing market:
› Single-family sales totaled 4,451 in June, down 1.2 percent from June 2013.
› Sales fell 4 percent from May.
› Median sales price in June was $230,000, up 10.6 percent from June 2013.
› Median prices increased 2.2 percent from May.
Note: Report’s 11 counties are Cherokee, Clayton, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Fayette, Henry and Paulding.
SOURCE: ATLANTA BOARD OF REALTORS