Metro Atlanta has seen a precipitous rise in home values over the past two years, and the north side of the city has led that rise.
Lower inventory has been a driving factor in pushing prices up, but recently, the number of sales has begun to decline — compared to a year earlier.
The most recent sales date from First Multiple Listing System (MLS) shows that, for metro Atlanta, the number of single-family detached homes sold year-to-date is down 6 percent and single-family attached sales are down 3 percent.
You would expect lower inventory to push values up and if inventory is low enough, sales could decline, but I don’t think that is the main reason for the decline in unit sales.
The chart to the left is quite surprising when you think about how far the housing market fell from the peak.
It’s hard to believe we are almost back to pre-recession levels.
In the past two years, asking prices have risen over 39 percent, and currently asking prices are only down from the peak of the market by 4.4 percent.
Keep in mind these are asking prices and not sales prices, but this is the primary reason why the number of sales are down.
Asking prices have risen almost twice as fast as they have fallen.
It’s hard to say how things will end up.
Despite higher prices, buyers seem to be willing to pay for homes that have everything, but buyers aren’t willing to settle on their wish list when paying top dollar.
Unless inventory jumps considerably, applying some downward pressure on prices and offering more for buyers to choose from, home buyers will be stuck waiting and fighting for the best homes on the market.