I am going to start my Monthly letter optimistically, but end it on a cautious note.

The records keep rolling, as closings in July for both single family detached and condos & townhomes were
up again over the same year ago period. Plus, we had more than enough lagged closings for condos and
townhomes in June to continue our consecutive double digit increases and that should continue for July as
well.

We closed 923 condos and townhomes in July or an increase of 2.3% over July 2004, which was a 34.3%
increase over July 2003. After lags are reported, we will have had 27 consecutive monthly double-digit year-to-
year increases.

Condos and townhomes should continue to close a greater percentage of units for the rest of 2005 and
beyond. The reason, in 2005 almost one quarter of new construction in Metro Atlanta is for condos and
townhomes. Almost 24% of 2005’s new construction is for condos and townhomes, which is up considerably
from eight years ago or 1997’s 2.2%.

There were 6,157 single family detached closings in July or an increase of 1.5% from the same year ago
period. For the year, single family detached has closed 7.25% more homes than January-July 2004.

The average sale price for condos and townhomes in July was $182,856, which is down almost 12M from
June’s average price, but still up 1.7% from the last year’s average. The average sale price for 2005 is still
below 2004’s average and even 2003’s average. The average sale price chart for condos and townhomes
offers a very good illustration of the “flat” average prices for condos and townhomes for the past few years.
We had another large increase in the average sale price for detached single family, as July produced an
average price of $267,330 or an increase of 7.2% over July 2004’s average. This was another all-time high,
eclipsing last June’s record by $1,300.

The months-supply-of-inventory (MSI) dropped across all categories from June to July. At the end of July
there was 6.8 MSI for single family detached resales and 10.8 MSI for condo and townhomes resales. We
have had a significant drop over the past year. A year ago we were at 7.7 for single family detached resales
and 12.8 for condo and townhome resales.

The days on market for all single family were 73.9 in July. This is 2.5 days lower that July 2004 and the
lowest since September 2002.

We have reported a lot of positive highs and lows for July. However, with gas prices going up and up, the
pressure for inflation will be great. With high inflation there comes higher interest rates, which will
negatively affect real estate. We will need to watch upcoming inflation reports cautiously.

Thank you,
Steve Palm
 

Smart Numbers

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