A supply-demand mismatch has continued to chill housing sales in metro Atlanta, according to a report from Re/Max of Georgia.
The number of home sales last month was down 7.1 percent from the level of a year ago, with the worst plunge coming in Clayton, where sales fell 17 percent.
That compares with a national decline of 1.1 percent during the same period, said John Rainey, vice president, Re/Max Georgia. "Greater Atlanta's housing market slowed down at a much faster pace than the national average – an August trend we've experienced the last couple of years."
Some of the drop-off is seasonal. The pace of sales in August is typically slower than earlier in the summer – many families try to lock into a purchase of a home in a new area before the start of the school year.
But the year-to-year decline is a sign of something out of kilter in the market.
Even though economy has been growing strongly, the problem in Atlanta is the long-running shortage of inventory – that is, homes listed for sale. With buyers often competing against each other for desirable homes, prices rise.
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The supply of homes listed for sale last month was down 13 percent from a year ago, according to Re/Max. Moreover, the supply scarcity is not spread evenly: It is worst at the lower end of the price tier, where first-time homebuyers cluster.
Experts say that housing responds slowly to market pressures. It takes a long time for developers to add thousands of lower-priced homes – even if there is demand for them.
And the faster the prices climb, the more people are priced out of the market or choose to rent, Rainey said. "Price increases, along with very low inventory, are greatly affecting our market."
Home prices have been climbing more than twice as fast as average incomes have been rising.
The number of sales fell in four of the five core counties. In Clayton and Gwinnett, it was a double-digit drop. In Cobb, it was 9 percent. The decrease was 8 percent in DeKalb.
In contrast, the number of sales rose 14 percent in Fulton.
Bill Adams, president of Adams Realtors in Grant Park, said the reason may be a flurry of construction at the north and south ends of the county. The city itself is emblematic of the region's imbalances: not enough room to build a lot of homes and property values make any construction more expensive.
Prices keep going up, while the number of sales falls.
In the Old Fourth Ward section, for instance, the number of sales has fallen 19 percent in two years while average prices have soared 35 percent.
While some experts have predicted a flow of new listings, that seems unlikely anytime soon, Adams said. “I’d like to see a transition to an equilibrium in the market, but I don’t think it’s going to happen.”
Number of home sales from a year ago
Gwinnett: -15 percent
Cobb: -9 percent
Fulton: 14 percent
DeKalb: -8 percent
Clayton: -17 percent
Source: Re/Max of Georgia
Median sales price, August, 2018
Gwinnett: $250,000
Cobb: $280,000
Fulton: $369,450
DeKalb: $295,000
Clayton: $137,000
Source: Re/Max of Georgia
Decatur home sales, past year
Number of sales: -22 percent
Price: +9 percent
Source: Adams Realtors
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