Single-family housing construction continued to heat up in Atlanta during the first-quarter of 2014. Good Job growth and low inventory continues to lead to strong demand for new housing throughout the Atlanta region. Area builders started 3,401 homes here during the first quarter, according to a report from Metrostudy. That was a 28% jump over the same period last year.
“Job growth is one of the single most important drivers of home demand, and Atlanta's pace of job growth is one of the highest in the nation,” said Eugene James, regional director of Metrostudy’s Atlanta's market. Employment is up by 2.2% from March to March and the region created 51,500 new jobs during that time. “This ranks Atlanta as the 6th best region among all metro areas in terms of year-over-year job creation and we have recovered 98% of the jobs that were lost to the Great Recession,” said James.
“Another important driver for new home demand is the extremely tight inventory of resale homes available on the market. The supply of available homes for sale has remained low for more than two years and the months supply remains below normal at a 3.9 month supply. Homeowners seem reluctant to attempt to sell their existing homes even though equity and home prices have been on the rise” said James.
“All of these factors have contributed to an impressive firs- quarter of 2014 for the single-family home market in Atlanta ," says James. On an annual basis, housing starts are up 55%. As of the end of March, Atlanta builders started 14,615 new homes, the highest annual tally since the third-quarter of 2008. Although construction starts have been increasing lately the finished housing inventory months supply number is still below normal. According to Metrostudy’s research, the current months supply for finished and vacant homes is 2.7 months. Normal is between 3 and 3.5 months. “We have not seen a number this low in over 12 years," says James.
New home starts have always been a good forward looking indicator of demand and closings. New home annual closings of 12,908 was 38 percent above last year’s closings volume. First Quarter 2014 quarterly closings were up, increasing to 3,141 units closed or 37 percent above last year’s quarterly closings.
Increasing demand and the limited supply of houses is pushing prices higher as well. The median sales price of new homes in the first quarter was $275,000, an all-time high for the region. “We expect to see continued price increases this year due to the limited supply of houses for sale. Another big reason new home prices may go up is because of the sharp increases on the price of raw land and finished buildable lots,” notes James.
For more information contact: Eugene James at 404.370.9001 x111
Email: [email protected]
About Metrostudy
Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. www.metrostudy.com.
Learn more about markets featured in this article: Atlanta, GA, Eugene, OR.
