April 21, 2006
There were 6,035 closings for all single family in March.
This is down 4.6% from March 2005, but after lags are reported we should
have about a 5% increase. This would be the third single digit increase for
2006 after we had only three for all of 2005, as the other nine periods were
double digit increases.
Single family detached was down 5.9%, while condos and
townhomes were up 3.5%. After lags are reported, condos and townhomes may
have a double-digit increase, but the streak of 33 consecutive doubledigit
increases may be in jeopardy.
The average sale price for condos and townhomes set an all
time high in March with an average of $198,284. This was an increase of 9.3%
over the same year ago period and almost a $1,000 higher than the previous
record set last December.
If prices continue the increase over 9% for condos and
townhomes, double digit increases will not continue. The last time condos
and townhomes had a year-to-year price increase greater than 9.3% was
February 2003.
The average price for Single family detached was $253,463
for March. This was only a 2.7% increase over March 2005 and Atlanta
remains, overall, a very affordable housing market.
A housing "bubble" keeps being mentioned, but Atlanta has
experienced relatively low increases the past 10 years, so should a slow
down occur nationwide, we should be sheltered somewhat from price declines.
We experienced a spike up in inventory and this may be our
first clear sign of a slow down. The inventory level at the end of March was
higher than at any point during 2005. This is actually more of a "normal"
trend, as 2005 was just very strong.
Months supply of homes experienced large jumps in March.
Single family detached – new went from 7.8 in February to 8.1 in March.
Condos and townhomes – new went from 7.4 in February to 7.8 in March. Single
family detached – resale went from 6.0 in February to 6.6 in March. Condos
and townhomes – resale went from 9.1 in February to 9.6 in March.
We will see if demand during the spring season will be
strong enough to reduce our increasing supply. If it is not, prices will
moderate, as supply increases.
Days on market will also increase during increased supply,
but in March DOM was 78.8 for all single family. This was 4.9 days less than
March 2005 and 4.5 days less than February. March typically sees a drop in
DOM from February as the "new" spring inventory is in more demand than the
inventory left over from 2005.
The April through June reporting periods will be key
indicators for where housing will trend the rest of the year. Interest rates
will hopefully moderate now, as any more increases will only slow us down.
Thank you,
Steve Palm
Smart Numbers
