There was an increase in new home closings in the Atlanta housing market in April 2016. The increase in percentage was higher compared to March 2016, which may indicate that the market is gaining strength. Closings rose 8.7% year-over-year to 1,341 – compared to the same month in 2015, new home closings had an increase of 6.9%.
Atlanta market reached new all-time price peak in the second quarter of 2016
According to the Q2 2016 US Home Sales Report from RealtyTrac [Link: http://www.realtytrac.com/news/home-prices-and-sales/june-and-q2-2016-home-sales-report/], home prices in the Metro Atlanta area hit a new all-time price peak. The report is based on official sales deeds gathered from more than 900 counties throughout the US.
The analysis shows that the median price for homes in Metro Atlanta was $192,000, which increased by 2% compared to the previous year, setting a new benchmark. Atlanta was one of 39 statistical areas which reached new all-time home price records in June, including Dallas ($240,156), Minneapolis ($235,950), Seattle ($385,000), and St. Louis ($190, 209).
Experts say that the reason for the recent price surge may be attributed to historically low interest rates in the Metro area. Home price appreciation is likely to drop once the low rates begin to increase once again.
Despite the record-setting increase, Atlanta is still one of the few major cities that have sub-$200,000 median home prices.
Increased interest rates
Interest rates remain substantially low, compared to several years ago. Due to the slight increase, those with limited income or tight budgets may be affected. However, it is important to note that increasing rates typically represent improvement in the economy, resulting in more jobs, raises, and promotions for employees.
Another positive impact of increased interest rates is its potential impact on buyers’ mindsets – it’s more likely that buyers will be more motivated to follow through on their home purchases.
According to experts, the increasing rates will likely continue until 2017, due to the fact that markets usually experience rate volatility during election years.
Lending regulations
Changes to the country’s housing industry include the implementation of new TRID (TILA-RESPA Integrated Disclosure) regulations, which were effective starting October of 2015. Although the market experienced slight delays in turnaround time for closings earlier in the year due to the new regulations, this is expected to stabilize once the industry begins to acclimate to the new guidelines.
New federal laws and policies also contribute to a more cautious lending environment, with lenders taking additional steps in order to ensure buyers are able to afford a loan and that properties are able to retain their appraised values.
Increased popularity of intown neighborhoods
Atlanta’s diverse and active job market, trendy nightlife venues, and affordable homes are some of the biggest reasons for its increased popularity for young professionals.
This is further enhanced by the arrival of both larger companies as well as small to medium-sized high-tech firms, which are sure to attract younger residents. Along with increased job availability, many exciting projects are currently underway, further increasing the popularity of many intown neighborhoods such as Adair Park, Capitol View Manor, Capitol View, Edgewood, Kirkwood, Lakewood, Peoplestown, and West End, just to name a few.
Another unique element increasing the popularity of Atlanta’s intown neighborhoods is the Atlanta Beltline. In other areas, bodies of water such as rivers and lakes serve as boundaries dividing certain areas. The Beltline, on the other hand, connects previously isolated neighborhoods, resulting to a more interconnected city.
This year, a significant number of new developers and investors are buying land within the Beltline as well as in nearby areas, directly affecting home and land values and further increasing the popularity of neighborhoods within its vicinity.