Home Prices in Atlanta Rose by 16.5% Over Last Year

Great news for the Atlanta housing market as we head into the summer season!  Prices rose by 16.5% over last year, according to Case-Shiller, making this the largest increase in the 21 year history of the index for Atlanta.  If you’re thinking of selling your home, give me a call — 404-803-0471.

Read the article from yesterday’s Wall Street Journal here:

Home Prices Score Highest Annual Gain Since 2006

By NICK TIMIRAOS

Sharp drops in the number of homes listed for sale and growing demand for home purchases sent U.S. home prices up by 9.3% in February from a year ago, the largest growth rate in nearly seven years, according to a report released Tuesday.

Where Housing Is Headed

In a sharp turnaround over the past two years, home prices are zooming up in more markets amid big declines in the supply of homes for sale. These tables show the various factors at play.

The Standard & Poor’s/Case-Shiller home-price index tracking 20 cities offered the latest signal that the U.S. housing market has rebounded after home prices reached a bottom in March 2012.

All 20 cities in the index posted an increase in prices versus one year ago for the second straight month. That hasn’t happened since 2005. Prices in Atlanta rose by 16.5%, the largest increase in the 21-year history of the Case-Shiller series for that market, and prices in Dallas were up by 7.1%, the record for the 12-year history of that index.

“The lack of homes available for purchase has forced potential buyers into bidding wars,” said Bob Walters, chief economist at Quicken Loans. “This clash of supply and demand has pushed home prices higher.”

While that’s good news for homeowners, it is bad news for anyone looking to buy a home this spring. The lack of inventory has created headaches for home buyers, particularly for first-time buyers looking for entry level properties in markets such as Las Vegas and Tampa, Fla., where investor demand is exceptionally strong. Investors are able to make all-cash offers, winning deals against buyers that need to obtain a mortgage and must get the home to appraise at their asking price.

Prices were up by 23% from one year ago in Phoenix, by 18.9% in San Francisco, and by 17.6% in Las Vegas. Other cities with double-digit gains included Detroit (15.2%), Los Angeles (14.1%), Minneapolis (12%), San Diego (10.2%) and Tampa (10%).

While inventory shortages are helping boost home prices, they could soon begin to limit sales volumes of previously owned homes. The National Association of Realtors warned on Monday that contract activity for future purchases appeared to be rising at a slower than expected rate due to low supplies of homes for sale.

Low levels of previously owned homes are helping home builders, which have witnessed double-digit increases in new home sales. The low levels have also helped send housing construction to a four-year high.

 

Some economists have warned that home prices may not be rising nearly as quickly as home-price indexes, such as the widely watched Case-Shiller index, would suggest. The Case-Shiller index is based on repeat sales of the same homes and includes foreclosure-related sales, which tend to sell for less than comparable nondistressed properties because they require more upkeep. The upshot is that when sales of cheaper foreclosed properties are rising, the Case-Shiller index will look worse. The inverse is true today. As the share of foreclosed-property sales has declined, the index is being pushed higher.

The home-price growth shown in Tuesday’s report is “not broadly reflective of what’s happening in the national housing market right now,” said Stan Humphries, chief economist at Zillow Inc., which publishes a separate home-value forecast that doesn’t include foreclosures. That series showed that home prices through March were up by 5.1% from one year ago. The Case-Shiller series, “is overly skewed to quickly rebounding markets…and is being boosted by a shift in transactions away from foreclosure resales,” said Mr. Humphries.

 

 

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