Home Prices Are Flying High

By Kirsten Ricci

Boy we are a million miles away from the great recession… right? Our homes are back to being a real investment and in most cases those investments are working nicely. The housing market over the past few years has been one of steady growth, limited supply and steady demand, all leading to higher prices.

Recently the S&P CoreLogic Case-Shiller index indicated U.S. property values in 20 major cities climbed 6.8 percent, which represents the biggest year-over-year gain since June 2014. Government data also reveals a faster than projected rate of new home sales so far this year. Combined with the fact that inventories of previously owned homes are at historically low levels and you get a high price appreciation that also fuels the new home market. This has been a consistent theme in this column for some time and it only underscores the basic economics of supply and demand.

Now, however, there is even more pressure on the market in the form of building materials, which are soaring. Large builders such as Pulte, Lennar, and KB are all indicating that they are successfully passing along those increases in the new home market. That means we’re still in a very healthy market and economy, but at the same time, these issues are exasperated at our level. This is high demand territory with limited space to grow so you do the math. In the past year the median home price in the Atlanta metro area rose 7.6 percent with residents in Fulton County getting the most value at a median price of $328,000 and Cobb County not far behind at $292,000.

We do have new homes coming into the market but in our immediate area those developments are relatively small. In Roswell there are several developments in construction near Centennial High School and recently a new residential development of 42 upscale townhomes at the intersection of Mansell Road and Houze Road was announced. That project still has to go through the Roswell Design Review Board.

There are similar projects in East Cobb as county commissioners recently gave the green light to 100 townhomes in two separate residential developments planned on Windy Hill Road and Olde Towne parkway. These developments are fairly small in scale and represent the size of projects that will probably continue in this area, as residents would be strongly opposed to anything much larger. As you move north, Alpharetta has a much more robust market for new homes but as soon as you hit the Forsyth County line things are really growing. New developments are coming online at an ever-growing rate but so far there has been no negative effect on home prices in this area.

Kirsten Ricci is a Roswell resident and a Berkshire Hathaway Agent who specializes in residential real estate in the north metro Atlanta area. She can be reached at 678-472-3832, kirsten@roswellrealty.net.