Homepricesup5.1% inDecember

Metro rise not as steep as it has been; ‘that’s a good thing,’ an expert says.

Home prices continue to rise in metro Atlanta, but the pace of increases slowed as last year came to an end.

Average home prices in December rose 5.1 percent higher from a year earlier, slightly above price growth nationally, according to the monthly S&P/Case-Shiller Home Price Index.

Experts said the closely watched report reflected what they’ve experienced in the market.

“We are seeing a slower appreciation in prices,” said Jeanette Schneider, senior vice president of RE/MAX of Georgia. “They are up, but not as rapidly as they were at the start of the recovery.”

A year ago, metro Atlanta’s prices were climbing at a 18.1 percent annual clip.

Rapid acceleration had been partly because of an imbalanced market in which there weren’t enough homes for sale. Moreover, if prices rise too fast, they can outpace the ability of many people to ever buy a home.

So the slowing pace is not troubling, Schneider said. “I think that’s a good thing. I think it’s a sign of a healthier market.”

Slow but steady price hikes should continue through the spring, she said.

Metro Atlanta home prices have climbed back to the levels first reached in the spring of 2004, according to the Case-Shiller report. However, those figures are not adjusted for inflation, and prices are up about 25 percent in the past decade, according to the Bureau of Labor Statistics.

Atlanta was among the leaders in new home construction for years, which is one reason prices did not soar as quickly as in some other cities. But Atlanta’s prices still rose until the bubble burst in mid-2007.

The market hit bottom in March 2012, propelled partly by tens of thousands of foreclosures. At one point, average prices were dropping at a pace of more than 17 percent per year.

The roller coaster then whipped from downhill to up: In spring 2013, prices were rising at an annual pace of more than 20 percent.

Shirley Gary, broker and license partner at Engel & Volkers Buckhead Atlanta, sees positive signs. “I don’t feel like I’m swimming upstream any- more,” she said.

Case Shiller is an average, masking the fact that prices in many areas — especially south of Atlanta — are still depressed. The market is strongest on the north side of Atlanta and in the near suburbs.

Moreover, purchase demand is not spread evenly among all prices, Gary said. “It is a tougher market at the low end, below $250,000.”

A decade ago, there was enormous demand for those lower-priced homes. But now, many owners of lower-priced homes are still underwater — that is, they still owe more on their mortgage than they can

Homes

reap in a sale. And unlike the bubble years of freeand-easy money, many potential buyers cannot qualify for a mortgage.

In contrast, demand is strong for homes priced between $500,000 and $1.5 million because the buyers are more financially secure, she said. “That really is a strong, strong segment of the market. These people are stock market people.”

The market is not yet “normal,” said Stan Humphries, chief economist for real estate firm Zillow.

He said the surging demand for apartments is a sign of imbalance.

Renters in metro Atlanta pay an average of $962 a month, up 8 percent in the past year, according to a report last week from Axiometrics, a firm specializing in the apartment market.

The market is not yet ‘normal.’

Stan Humphries Chief economist for real estate firm Zillow