September 21, 2006
The Atlanta housing market is showing more signs of a
slowdown. Single family detached housing closed 6,184 units in August. This
is down 7.2% from August 05and after lagged closings are reported, will
probably still be down.
Single family detached closings are still negative for July
year-to-year. Even after lags have been reported, single family detached is
down 1.4%. Taking into account the results for July and August there is a
very good chance that after September is reported we may have our first
detached year-to-year down quarter since 1st quarter 2003.
Our streak for consecutive double-digit year-to-year
increases for condos and townhomes looks to be in jeopardy. There were 1,046
condo and townhome closings in August. This is a decrease of 2% from August
2005 and after lags are reported we should have an increase, but not a
double digit one.
The average sale price for single family detached in August
was $267,174. This is an increase of 2.5% from the same year ago period.
This was also the sixth out of eight 2006 reporting periods that have had a
year to year change for single family detached that is below the lowest
change for all of 2005.
Through eight periods of 2006 we have an average sale price
for single family detached of $263,287. This is an increase of 3.3% over
2005, but 2005 had an increase of 6.3% over 2004.
Condos and townhomes had an average price of $186,669, which
is unchanged from July 2005 and all of 2005. Our inventory keeps increasing.
Single family detached - new went from 9.4 to 10.0 (months-supply),
condos and townhomes new went from 7.6 to 8.4, single family
detached resale went from 7.2 to 7.4, and condos and townhomes
resale went from 9.4 to 9.5. As you can see, all categories for months
supply went up from July 2005, but the "higher" priced new homes increased
much more than resales.
Expired listings had a large year-to-year increase in
August. The number of expired listings for all single family was 5,031
compared to 4,193 a year ago. This was the 9th consecutive increase and the
largest unit increase since May 2003. With our increasing inventory and
slowing of demand, the number expired listings will very likely break
all-time records by the end of 2006.
The number of withdrawn listings for all single family was
2,304 in August. This was an all-time high and our third straight month we
have had over 2,000 withdrawn single family listings.
I have mentioned a number of negative trends, but now for
the good. Atlanta is slowing, but not nearly as bad as in other markets,
i.e. Florida, West Coast, and Northeast, etc. I believe that Atlanta will
have a "soft" landing or minimal slowing that should not last more than a
few quarters. Interest rates have declined since 6/29 and gasoline prices
have tumbled back down over a $1 off their highs of a month ago.
If we can maintain these recent positive economic trends,
plus have unemployment remain low and interest rates not increase, housing
will improve.
Thank you,
Steve Palm
Smart Numbers
