The story of the Atlanta housing market is currently one of tight inventory.
Atlanta’s housing market holds about 3.2 months’ supply, according to RE/MAX of Georgia. A balanced market is characterized by about six months’ supply.
While inventory is limited across the market, the inventory story is even more prevalent at the lower end of the market. Zillow reported inventory at the middle and bottom tiers of the market dropped 20.7 percent and 19.7 percent, respectively, over the year in April. At the high end, it declined 3.8 percent, according to Zillow.
As of April, home values in the city were up 6.5 percent over the year.
The strong competition and rising prices are shutting many first-time buyers out of the market, and this causes potential move-up buyers to stay put.
Adrian Smith, senior agent for Redfin in Atlanta, told the Atlanta Journal Constitution that the stiff competition has led some buyers to bid more than the appraised value of the home. They may win the bidding war, but when they apply for a mortgage, the lender won’t approve a loan for more than the home’s worth.
While bidding wars wage on, the rental market is booming in Atlanta. In Fulton, Clayton and DeKalb counties, nearly half of households are living in rental properties, according to a real estate expert in Forbes.
The Atlanta metro suffered greatly during the foreclosure crisis, and insti- tutional investors rushed in to purchase foreclosed homes at a bargain. Today, those homes are up for rent.
Ten years ago about 11 percent of single-family homes in the Atlanta area were being rented. In 2014, the most recent year reported, single- family rentals made up 19.3 percent of the market, according to an article in the Atlanta Journal Constitution.
One in every 1,333 homes is in foreclosure in Atlanta, according to the latest data from RealtyTrac. The median sales price in June was $230,000, down 4 percent from June 2015. The median foreclosure sales price was $68,000 in June, down 12 percent from a year earlier.