Tuesday, September 25, 2012
News Atlanta home prices improve, but continue to lag far behind other U.S. cities
Posted by Max Blau @maxblau on Tue, Sep 25, 2012 at 1:34 PM
The Standard & Poor’s/Case-Shiller index came out this morning, indicating that home prices in July were on the rise. In that report, however, are mixed messages regarding the current state of Atlanta's housing market.
While Atlanta home prices increased between June and July by 2.6 percent, they remain down 9.9 percent on a year-to-year basis — by far the worst of the 20 cities measures in the index. To put those numbers into context, the Atlanta Business Chronicle compares that to U.S. city averages of 1.6 percent monthly and 1.2 percent yearly growth.
Atlanta's low housing values, moreover, don't necessarily reflect on the area's poor economy. In fact, it might be the exact opposite. The Washington Post pointed out earlier today that Atlanta construction has rebounded over the past year, stating:
First, the rate of home construction has surprisingly little to do with prices. The worst market, Atlanta, featured a 9.9 percent drop in home prices over the past year, yet the number of housing permits issued in the first seven months of 2012 was up a whopping 78 percent from the same period a year earlier. Atlanta appears to be a case in which builders are getting ahead of the market; it is a city with middling job growth, yet they are building homes at a breakneck pace, sending prices down.
Their analysis makes some fair assessments about why Atlanta's housing prices haven't recovered the way many other large metro areas have. Overall, it's a positive indicator — albeit with some warning signs. That might mean programs like Dekalb County's new permit initiative aren't necessarily a good thing for the larger Atlanta economy, despite their intentions to help builders complete stalled construction in the area.
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