Posted in Atlanta Condo Market, Atlanta Market | Posted on 08-11-2010 | Written by Metrostudy News
(Atlanta, GA– August 1, 2010) The Atlanta housing market is still struggling, but inventory is showing signs of improvement, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the U.S. Housing market.
“Those who follow the housing market expected closings to increase in 2Q10 due to the expiring housing tax credit,” said Eugene James, director of Metrostudy’s Atlanta Region. “They did increase over the prior quarter, but decreased compared to last year’s numbers.” In Atlanta new construction closings increased 16% over 1Q10. However, the North Atlanta market saw a 13.6% decrease in quarterly closings compared to 2Q09 and the South Atlanta Market saw a 14.5% decrease compared to 2Q09.
“We did see positive news in starts, though,” said James. The North Atlanta market showed a major increase of 60% in quarterly starts to 1,167, and the South Atlanta market saw a 32.3% increase to 401.
In North Atlanta, housing inventory is down by 38% year over year and down 70% from its peak in 3Q06. There are 10.7 months of supply, where 8.5 to 9 months is considered normal. In South Atlanta, total housing inventory is at 10.4 months of supply, down 42.3% year over year and down 77% from the peak in 2Q06.
“We believe the tax credit pulled in some of tomorrow’s buyers, and so we expect to see a slight decline in closings during 3Q10,” said James. “But the good news is interest rates remain near historic lows and home prices appear to have bottomed.” According to Freddie Mac’s weekly mortgage market survey, as of July 1, 2010 the 30- year average mortgage rate was 4.58%. Interest rates were 5.08% during the first quarter of 2010. One year ago the 30-year fixed rate was 5.42%.
“Sooner or later, the economy will rebound, jobs will return and new households will form. When that time comes, housing inventories will be lower than demand and will force prices to rise,” said James.
For information contact:
eugene james @ 404.370.9001