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Spring buying season complicated by falling Atlanta housing inventory

by Peter Thomas Ricci

spring-homebuying-market-home-flowers-front-porch

This spring homebuying season could be a difficult one for first-time buyers and middle-income consumers in Metro Atlanta, according to a recent analysis from Zillow.

According to the company’s April Real Estate Market Report, the inventory of homes in Atlanta’s lower- and middle-price tiers have fallen 19.7 and 20.7 percent in the last year, while top-tier inventory has fallen a relatively manageable 3.8 percent. With affordable inventory falling and Atlanta’s median sales price continuing to rise, the homebuying plans of middle-class consumers have grown more complicated – and may be contributing to a sales slowdown in the area.

Inventory Woes Threaten Housing

Metro Atlanta’s inventory woes are hardly unique. Nationwide, entry-level inventory is down nearly 8 percent year-over-year, while overall inventory is down 3.4 percent.

Svenja Gudell, Zillow’s chief economist, said the supply and demand mismatch will create struggles for prospective buyers.

“New construction has been sluggish over the past year; we’re building about half as many homes as we should be in a normal market,” Gudell said. “There still aren’t enough homes on the market to keep up with the high demand from every type of homebuyer. In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer’s selling season’s borders will most likely be blurred again as many buyers are left without homes and will need to keep searching.”

Our chart below spells out the inventory issues in the nation’s largest housing markets:

Metro Area Bottom Tier Inventory Change Middle Tier Inventory Change Top Tier Inventory Change Total Inventory Change
Atlanta -19.7% -20.7% -3.8% -12.5%
Boston -22.3% -14% 14.4% -6.4%
Chicago -15.1% -16.7% -1.8% -9.8%
Dallas -32.1% -35.1% -11.9% -21%
Los Angeles -19.4% -10.8% -1% -8%
Miami 10.3% 16.6% 21.9% 18%
New York -10.8% -4.1% 4.9% -3.8%
Philadelphia 2.3% -8.7% 1% -2.7%
Phoenix -20.2% -6.6% -4.1% -8%
San Francisco -14.9% 0.1% 6.1% -2.1%
Seattle -28.5% -20.9% -15.6% -21.1%

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