The annual winter slowdown in the residential real estate industry has officially struck Atlanta, but has had a lesser impact than past years. Last month, The Cal-Culator displayed the largest decline and the lowest number since its recent creation. The October Cal-Culator posted a 5.0, a 0.9-drop from the previous month due to the 16-day government shutdown and higher mortgage rates, among other factors.
The November Cal-Culator ranks a 5.1 due to a number of positive signs in mortgage rates and home prices, combined with multiple paralyzing housing industry factors such as home sales and home inventory.
After last month’s shattering drop, the latest National Association of Realtors' quarterly report provided data that showed that the winter housing industry has been gaining steam from rising home prices. In the year’s third quarter, the median existing single-family home price increased in 88 percent of measured markets with 33 percent of areas reporting double-digit increases.
Unfortunately, the rise in home prices is a result of the housing crunch that is still plaguing many metropolitan areas, including Atlanta. Realtor.com’s Winter Home Buyer Report revealed that a quarter of winter buyers were still in the market because they were unable to find a home during the last home-buying season.
Though home prices rose, existing home sales fell for the second month in a row. The annual pace of existing home sales fell 3.2 percent to a seasonally adjusted annual rate of 5.12 million in October, down from 5.29 million in September, “Existing Home Sales Fall For 2nd Month In A Row In October, Prices Up As Inventory Stays Tight.”
“The erosion in buying power is dampening home sales,” said Lawrence Yun, chief economist with the NAR. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”
In more positive news, mortgage rates have been edging lower this winter after a summer of higher rates. The average rate for a 30-year, fixed-rate loan continued to fall to 4.22 percent from the August high of 4.58 percent, according to mortgage buyer Freddie Mac. In comparison, the 30-year-loan averaged 3.34 percent in early 2013.
In November, Atlanta homeowners saw relief in underwater mortgages. The Atlanta Journal Constitution reported that fewer metro Atlanta homeowners owed more on their homes than the properties were worth. The third quarter posted 38 percent of metro homeowners were dealing with negative equity, compared to 44 percent in the second quarter.
Despite the improvements, metro Atlanta still ranks second in the nation among large metropolitan areas (behind Las Vegas) with the highest negative equity rates, reported the Atlanta newspaper. Housing recovery is strongest in Cobb, North Fulton, Cherokee, Forsyth and Gwinnett counties.
The next Cal-Culator will be released Jan. 7 and will hopefully start off 2014 in a positive direction.