spot_img
5 C
London
Wednesday, December 7, 2022
spot_img

Atlanta home prices up 23.5% from a year ago

- Advertisement -spot_imgspot_img

Hedge funds and corporations have been buying up houses in metro Atlanta, adding fuel to an already hot market in which buyers are frequently bidding against each other as they try to find their next home among the shrinking options.

“There is a complete imbalance of supply and demand,” said Kristen Jones, owner of Re/Max Around Atlanta Realty. “I don’t think we will continue to see the double-digit appreciation that we have seen over the past two years, but prices will continue to rise.”

After the collapse of the housing bubble in 2007, the market was flooded with homes. Many builders went out of business, and the remaining companies became cautious. Even after the glut was absorbed, construction was slowed by zoning restrictions.

The lag in building has only grown worse during the pandemic as supply chain problems make many materials more expensive or hard to acquire. Meanwhile, construction has been hampered by labor shortages.

According to AJC, the median price of a home sold in January was $350,000 – up 23.5% from a year ago, according to a report released Thursday by Re/Max.

In the 28-county area covered by Re/Max, 5,463 homes were sold in January. That’s down 15.4% from last year, mostly because fewer houses are for sale, real estate agents said.

Georgia Multiple Listing Service, which covers a smaller, 12-county area of metro Atlanta, found a 22.8% increase in prices from a year earlier. The number of sales decreased by 17%.

While prices in the region have risen steadily, houses are still a bargain compared to many cities in the North and West. That has attracted investors, especially hedge funds and real estate investment trusts, which are looking to buy homes in order to lease them.

About one-third of the homes sold in the region are purchased by investors, both individuals and groups of people who pool together money to make big-ticket investments, according to a study by Redfin, a national real estate firm.

Among metro areas, Atlanta now ranks No. 1 in the percentage of houses sold to investors.

The influx of big money drives up prices since investors are less constrained by cost and generally offer cash. “The level of institution investment in Atlanta does drive price points, especially in the lower brackets,” said Travis Reed, president of HOME Real Estate, an Atlanta-based real estate agency. “The long-term effect is that, first and foremost, it will be harder to afford residential real estate.”

And, because most of those purchases are held either to rent or as an asset to be sold years in the future, it means fewer houses on the market.

In a market balanced between buyers and sellers, the number of homes listed for sale should roughly equal the number sold over six months, experts say. But the 8,733 homes listed for sale last month represented just 1.2 months of sales, according to Re/Max.

The tilt toward sellers has been going on for years. The pandemic also spurred many people toward home buying with an eye toward larger spaces for working at home.

Yet supply has not come close to keeping up.

In desirable areas, the bidding can be a frenzy: 155 offers were made for one Forsyth County home, which sold for about $600,000, according to Shea Zimmerman, managing broker at Harry Norman Realtors.

The highest price doesn’t always win. Sellers generally prefer a cash offer to one in which they must wait for a mortgage approval. Sellers may not want the deal to be contingent on repairs.

- Advertisement -spot_imgspot_img
- Advertisement -spot_imgspot_img
SourceAJC
Latest news
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
- Advertisement -spot_img
Related news
- Advertisement -spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here