May 20, 2004
April was another
"up" period. Total single family was up 5.3% in April over the same year ago
period. After lagged closings have been factored into the equation the
percentage will be closer to 10%. This is not as high as in March when we
were up over 23%, but it should also be noted that last April is when we
started to experience positive increases after a weak first quarter 2003.
Single family
detached was up a modest 2.3%, but condos and townhomes are really strong,
as they increased 32.3% before lags are even considered. Remember, in March
condos and townhomes were up almost 50%, so April may be almost as strong
after all closings are reported. Since June 2003, condos and townhomes have
averaged about a 25% increase over the same year ago period. Townhomes and
condos are usually a lower price compared to single family detached. They
are also more common in mature markets, i.e downtown, after land has become
too expensive to build out, so building up is the better alternative.
The average sale
price in April for total single family was $230,446. The average price for
single family detached was $237,076, while for condos and townhomes it was
$184,656. The $53,000 difference in price is what is driving up the demand
for condos and townhomes. However, two years ago the average price in April
was $182,756 for condos and townhomes, while the average sale price for
single family detached was $221,653 or a spread of $39,000. As the demand
for condos and townhomes continues, look for the average sale price to start
increasing and the "spread" coming closer together.
As the housing gets
stronger, days on market keeps improving. For the sixth time in the past
seven periods, days on market declined over the same year ago period. The
days-on-market for single family detached was 77.5 and for condos and
townhomes it was 81.4. If our strong housing market continues for the rest
of 2004, we will have our first total year improvement in days on market
since 1999.
Interest rates have
continued to slowly inch upward over the last month. The Federal Reserve has
implied that interest rate hikes are likely in the near future, however,
they also have said that the rate hikes would not be as swift as in 94-95.
The Economic Forecasting Center at Georgia State University has released its
quarterly forecast for the Georgia Economy. Job growth numbers for last year
from the BLS have been revised to show that the Atlanta area did not lead
the nation in the creation of new jobs in 2003, but in fact lost jobs. The
outlook for 2004 is better with an increase of 41,900 jobs predicted for the
Atlanta area.
Atlanta’s recovery
is expected to follow the nation’s recovery. The national economy grew at a
4.2% rate for the 1
May 2003
