Jed Kolko, chief economist for the real estate information company Trulia, recently highlighted the top ten metro areas where real estate asking prices rose the most over the last year.
According to the report, the Atlanta real estate market saw the biggest year-over-year gain, when compared to the 100 largest metro areas in the U.S. Home sellers’ asking prices in the Atlanta metro area rose by a whopping 16.2% last year (when measured from January 2014 to January 2015).
Other top-performing metros included Cape Coral-Fort Myers, Florida, where asking prices rose 15.4% last year; and Deltona-Daytona Beach-Ormond Beach, Florida, where they rose 13.9%.
Job Gains Helping Atlanta Housing Market in 2015
Trulia cited job gains as one of the driving factors in these rising real estate markets. In Atlanta, the unemployment rate fell to 6.2% in recent months, down from a recession high of nearly 11% back in 2011 (source: Bureau of Labor Statistics). So clearly, there are more people working in Atlanta today than in the past. This puts more people in a position to buy a home, thereby increasing demand in the local housing market.
On the supply side, Atlanta’s real estate market has been comparatively stable. According to a recent report from Realtor.com, the total number of homes listed for sale in the area has changed little over the last year or so. So if the local housing market is changing, it’s mostly due to stronger demand.
For these and other reasons, the economists at Realtor.com recently ranked Atlanta as one of the top-ten “Hot Housing Market to Watch” in 2015.
According to Zillow, home prices in Atlanta rose by 14.5% over the last 12 months. Their prediction for the next 12 months is more modest by comparison. The company expects prices in this real estate market to rise 4% – 5% over the next year.
Atlanta is also one of the most affordable real estate markets in the country, when compared to other metropolitan areas. At the time this story was published, the median house price for this metro was $154,600, which is relatively affordable based on average incomes in the area.
According to a recent report by HSH, a mortgage research and publishing company, Atlanta home buyers need to earn $35,800 per year to afford a home (based on loan payments, taxes, and insurance for a median-priced house). That makes it one of the most affordable housing markets in the southeastern United States.
Low Mortgage Rates Fueling Demand
Low mortgage rates are another factor driving housing demand in Atlanta, and elsewhere around the country. According to Freddie Mac, the average rate for a 30-year fixed home loan dropped to 3.78% last week, down from 3.86% the week before. The 30-year average has been hovering below 4% since last winter.
Analysts expect long-term interest rates to remain low for at least the next few months. This, combined with the rising home prices in Atlanta’s real estate market, are creating a sense of urgency among local home buyers. While rates may remain low for the foreseeable future, house values have risen sharply and will likely continue moving north.
Disclaimer: This article contains third-party data that is deemed reliable but not guaranteed. It also contains forward-looking statements (predictions and forecasts) from third parties relating to the housing and mortgage industry. Such statements are the equivalent of an educated guess and should not be viewed as facts. We make no claims about the future of the Atlanta real estate market.