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Many records were broken for expired and withdrawn listings for both the month and the year for December and2006. There were 21,942 withdrawn listings for all single family or 4,200 more than 2005’s record high.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.

 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

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