Sales Up in June as Buyers Take Advantage of Huge Price Reductions
Posted by Dac Carver — August 18, 2009
Metro Atlanta home sales rose in June for the first time in nine months and just the third time in 33 months as buyers took advantage of deeply discounted home prices, which are at levels not seen in nearly 10 years.
Sales of single family detached homes and condos were up 2% from a year ago. Areas that led the way included Alpharetta West/Roswell (+24%), Atlanta Intown (+16%), Dunwoody (+17%), and Vinings proper (+79%).
Prices were down 16% from June 2008 and down 22% from the all-time high set exactly two years ago in June 2007. The metro Atlanta average sales price for all residential real estate was $209,999, about where it was in 2000.
There is general sentiment that sales are stabilizing in metro Atlanta and the nation as a whole. Metro Atlanta pending home sales were up in June for the second consecutive month, and national pending home sales were up for the third consecutive month. However, sales are still well below 2006 peaks and housing inventory remains at historically high levels, so prices will continue to be under pressure. In fact, a recent report in The Wall Street Journal quoted J.P. Morgan Chase & Co. analysts as predicting prices of homes in the $750,000-plus market will continue to slide into 2012. The J.P. Morgan Chase assessment is similar to a recent Case-Shiller prediction that home prices will slide into 2011.
One major obstacle to a sustained housing rebound, particularly in the market for homes that require non-conforming loans ($417,000+), is the availability of credit. For the most part, banks are holding firm to stiff down payment and cash reserve requirements.
There are reasons for optimism in metro Atlanta. The area continues to be one of the fastest growing in the country. Even though home sales here are at year 2000 levels, more than 1.4 million people have moved here since then, making the case for enormous pent-up demand in the marketplace (see accompanying chart). Anecdotal evidence abounds as well. Beacham & Company’s website traffic is up 82% in 2009 and our agents report heavy buyer traffic at weekend open houses since the beginning of summer. Also, metro Atlanta housing inventory continues to decline. In June, inventory was at its lowest level in nearly three years. Inventory must continue to decline to create upward pressure on home prices.
For graphs and figures, please click here.