July 21, 2006
There were 7,990 single-family closings in June or a
decrease of 3.3% from June 2005. After lags are reported, we should then
have an increase.
I have to admit that I am surprised by the Atlanta real
estate market’s resilience so far in 2006. After so much negative
International news, higher interest rates, escalating energy prices, etc I
would have thought our market would be "flat" at best, but we are up 7% over
the first half of 2005.
Single family detached closings for June were down 4.0% at
6,846, while condos and townhomes were up 1.1% with 1,144 closings. We have
had 36 consecutive double-digit year-to-year increases for condos and
townhomes through May.
Atlanta’s large available lower priced inventory of housing,
below $300,000 for detached single family and under $200,000 for condos and
townhomes, have been the main reason why Atlanta has been more sheltered
from a housing downturn than in other Metro areas across the US.
Smartnumbers covers most of the Southeast and some of the
Florida Metro areas that really exploded in volume and price over the past
few years are showing large declines this year. The Naples-Ft Myers area and
the Miami-Palm Beach areas have closings down over 30% from the same year
ago periods, while Panama City Beach hasseen a 25% drop in condominium
prices over the past 12 months.
Atlanta’s real estate prices have also been on the increase
every year, but at a very moderate pace. The average annual price increase
for all single family housing has been under 5.0% for the past 6 years, not
30-50% in some of those Florida markets mentioned above.
The average sale price was $264,206 for all single family in
June. This was up only 3.2% from June 2005 and year-to-date is only 2.0%
higher than 2005’s average price.
Single family detached set a new all-time high with an
average sale price of $276,722, while condos and townhomes had an average
sale price of $189,306 or a decrease of 2.9% from June 2005.
Inventories continue to increase more than normal and if
this continues it will put pressure on prices not to increase or even
decline. Inventories of single family detached have increased substantially
this year, 10,000 units since 12/31/05, so pressure on pricing may show
greater signs of flattening or even dropping in the second half of 2006.
August 2005 saw a spike in withdrawn listings that has
continued through June 2006. As inventories increase, so does months-supply
or the time it takes to sell a home. Consumers may be switching listings
more, as we found 1,128 closings last month that were previously listed.
Days-on-market remained relatively low for all single family
in June at 73.7. However, TDOM or total-days-on-market, which takes into
account previously listed time periods, was at 96.6. This also does not take
into account listings that were withdrawn or expired and not re-listed. That
is why months-supply is sometimes a better gauge for overall market time
than days-on-market, and months supply is on the increase.
Thank you,
Steve Palm
Smart Numbers
