The December Cal-Culator’s outlook and promise for Atlanta’s residential real estate market in the new year seems to be ringing true. For the first time in The Cal-Culator’s history, the index has risen to 6.0 in part due to national and local rising home prices, increased home sales, a decrease in foreclosures and lowered interest rates, among other factors.
The Atlanta Board of Realtors reported home sales in the 11-county metro region experienced a 1.9 percent increase in December from the year prior. National home sales of new and existing homes saw a 6.8 percent increase from the year earlier with the South having the strongest surge at 10.6 percent.
“We expect these statistics to begin rising as the warmer weather arrives, but this reversal of the downward trend established over the last several months is a welcome change,” said Atlanta Board of Realtors President Todd Emerson.
The latest data from CoreLogic found that metro Atlanta home prices rose 15.7 percent year-over-year in November. Home prices appreciated 13.3 percent overall in Georgia – the fifth highest in the nation.
“The market appears to be shrugging off rising interest rates, sluggishness in [national] employment growth and an uncertain economic environment,” said Steve Murray, editor of REAL Trends Housing Market Report.
However, some national month-to month numbers are moving in a negative direction, according to the S&P/Case-Shiller index posted on Jan. 28. The national measure of home prices posted its first month-over-month decline, 0.1 percent, in 10 months.
“While housing will make further contributions to the economy in 2014, the pace of price gains is likely to slow during the year,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Foreclosures reached a decade-low in Atlanta in January, according to the Atlanta Board of Realtors. Metro Atlanta foreclosure notices were down 56 percent from January 2013, continuing the trend of decreased foreclosures since 2011. The decline has been attributed to the improving economy, including the lowered unemployment rate in Georgia. Decreased foreclosures, combined with historically low inventory of for-sale homes, increased new-home construction by 38 percent in 2013 as builders try to fill the void of the housing crunch.
“The market’s no longer getting weighed down by foreclosures,” said Daren Blomquist, vice president at RealtyTrac. “There’s a more normal, healthy pattern going forward.”
In December, the Federal Reserve announced it would buy $10 billion less in bonds per month in an effort to hold down long-term interest rates. The effects may already be reverberating throughout the industry. Though interest rates have risen a full percentage point since roughly a year ago, mortgage buyer Freddie Mac announced the average 30-year-loan fell to 4.32 percent during the last week of January, much to hopeful homebuyers’ delight.
The next Cal-Culator will be released March 11 and will hopefully reflect a positive month in Atlanta residential real estate.