Atlanta Metro 2014 Housing Inventory Recap

Now that 2014 is over and the numbers have been updated for the most part, its a good time to look back on the year to understand what happened in housing last year and more importantly, gauge where we are today.

A key housing indicator is the months of inventory or absorption rate. This indicator measures the supply and demand in our housing market (which in turn tells us where prices are going).  Months of inventory measures the amount of time it would take for all of the homes currently listed to sell, if no one else put their house up for sale, given the average number of homes sold in the past three months.  The 6 month mark is considered a balanced market. More than six months of inventory and we call it a “Buyer’s Market” as the supply is greater than the demand and buyers have the upper hand in a negotiation. This is what we experienced from 2007 through about April of 2012 in Atlanta.

When inventory falls below six months, we have a “Seller’s Market” because demand is higher than supply. This is what Atlanta has been experiencing since March of 2012 and continues to experience now. The upside of a Seller’s Market for home owners is that prices rise when there are a lot of buyers and not enough to buy. See “Median Home Price Increases in Atlanta” to see how high prices have increased over 2014, it may surprise you!

Back to months of inventory. The chart below plots the months of inventory with the Red Line. Blue bars show the total active homes for sale for that month and the black bars represent the total number of homes sold.



Takeaways:

  1. Inventory is very low still, ending December at just under 4 months of inventory. The green line represents 6 months of inventory which is a balanced market. We are definitely in a Seller’s Market.
  2. Notice that the number of sales has for the most part remained the same and even increased over the last few years. This is very good. What has changed is the number of houses on the market. In July 2007, there were well over 40,000 homes for sale. In July of 2014 we topped out at just over 14,000 homes for sale. A healthy number for our market would probably be around 25,000 homes for sale at the peak of the summer.
  3. Some good news is that inventory levels were higher this year over last year, and at the peak of inventory in March, we had the highest level of inventory since April of 2012. We anticipate that with the rising home values, we will see more Sellers putting their homes on the market this spring and summer. This will be great news for all of those Buyers out there who are waiting for something good to go up for sale!

The main takeaway from this data is that now is the time to list your house. The competition is low, the demand is high and prices have for the first time in 7 years, returned and surpassed the median sales prices from 2007 in Atlanta. That means that if you have been holding off on making that move because you think you would have to bring money to the table to close, you may be pleasantly surprised right now by what you can get for your home. To know for sure, we are offering a free Home Value Analysis through the end of the month. Just click on the button below to find out what you can get for your house today.

Free Home Value Report