December 2006 Metro
Atlanta Real Estate Market Update
January 21, 2007
We are reporting on very different
year-end statistics than we did a year ago. At the end of 2006 we had a
down housing market compared to the end of 2005 when housing was really
exploding up.
There were 80,308 closings for all single
family in 2006. This was still an increase over 2005 by 2.5% or 2,000
closings. Detached single family was up 1.2%, while condos and townhomes
were up a very respectable 10.5% in 2006.
In December there were 5,549 closings for
all single family. This is a decrease of 14.2% from December 2005 and
the 4th consecutive monthly decline. Detached single family was down
14.3% or the 5th consecutive decline, while condos and townhomes were
down 13.8% or the 3rddecline over the past 4 periods.
The average sale price for all single
family for 2006 was $250,483 or only a 2.1% increase over 2005. This is
the smallest percentage increase since records have been kept. The
average sale price for the past 5 periods (August-December) was only up
1% from the same year ago time frame.
The average sale price for single family
detached was $260,723 for 2006, while condos and townhomes had an
average price of $192,495.
The average price for condos and
townhomes for December was $200,158 and the first time that the average
was above $200M.
Many records were broken for expired and
withdrawn listings for both the month and the year for December and2006.
There were 21,942 withdrawn listings for all single family or 4,200 more
than 2005’s record high. There were also 56,094 expired listings for all
single family or almost 5,000 more than 2004’s record high.
In December there were 1,301 expired
listings for condos and townhomes and 5,804 expired listings for
detached single family. Both of these set record highs easily surpassing
1,091 in December 05 and 5,611 in September 06.
Days on market ended the year at 79.3 for
all single family. This was unchanged from 2005, while single family
detached was down .04 days at 77.2 and condos and townhomes were up 1.1
days at 91.0.
Below is a chart that really sums up our
year-to-year housing market from 2005 to 2006. I have always stated that
months supply is the best gauge for the "health" of a housing market.
The higher the months supply the weaker the market and visa versa.
| |
12/31/2005 |
12/31/2006 |
% Change |
|
New - Single Family Detached |
7.4 Months |
11.2 Months |
51.4% |
| New - Condos & Townhomes |
6.9 Months |
9.6 Months |
39.1% |
| Resale - Single Family Detached
|
5.4 Months |
6.5 Months |
20.4% |
| Resale - Condos & Townhomes |
8.5 Months |
8 Months |
-5.9% |
As you can see, months supply is
much greater for the "high priced" new construction and has increased
dramatically over the past year. In 2007, demand for the lower priced
resales and discounting on high priced lots for new construction should
reverse this trend.
Interest rates need to remain low and
employment levels remain high, so that housing can rebound in 2007. This
should be by the end of the second quarter or in the third quarter 2007.
Thank you,
Steve Palm
Smart Numbers