May 22, 2006

Our housing market continues to show signs of weakening, but we continue to have almost double-digit increases for single family housing. The first quarter was up over 9% from 1qtr 2005 and after lags are reported we should have another increase for April.

There were 913 closings for condominiums and townhomes in April, as this is already ahead of 2005’s 902. After lags are reported we should have our 35th consecutive double-digit increase.

There were 5,183 closings for single family detached or a decrease of 7.6% before lags are reported. There is a good possibility that even after lags are reported that that our increase may be the lowest reported in some time.

Our inventories for single housing stabilized after our spike up in March, but in the first half of May there has been another spike up and I am very curious to see where we will be at for our May reporting. The average sale price for detached single family was $260,852 in April. This is an all-time high, but was also our lowest year-to-year increase in 16 months. The last previous all-time high was $260,569 last August and the 2.2% increase in price was the lowest increase since the 1.2% increase December 2004.

The average price for condos and townhomes was $193,129 or an increase of 7.7% from April 2005. We have now had average price increases the last three periods of 7.0, 9.2, and now 7.7%. All of these increases are greater than the previous 24 reporting periods.

Days-on-market was at 76.7 for all single family. This is almost 3 days less than the same year ago period. Single family detached was at 73.9 and condos and townhomes were at 92.6. We have had strong demand for condos and townhomes the past 2½ years, but at the same time, we have had a lot of inventory. Inventories for condos and townhomes have now been above 8,000 units the past two months. This is much higher than the 1,000-unit inventory average in the late nineties.

There were 3,881 expired listings for all single family in April. This is the 5th year-to-year increase after 9 consecutive decreases.

There were 1,576 withdrawn listings for all single family housing in April. Through the first 4 months in 2006 we have had almost a thousand more withdrawn listings than the first months of 2005.

Interest rates averaged 6.28% for a 30-year mortgage and 5.91 for a 15-year mortgage in Atlanta the week ending 5/20/2006. Increasing interest rates have the greatest negative impact on housing than any other variable. The last time we experienced interest rates at these levels was May 2002.

We are now heading into the busiest home-buying season of the year and additional increases in interest rates could very well slow our spring-summer housing market.

Thank you,

Steve Palm

Smart Numbers

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