This year is shaping up to be a hugely positive one for new construction in Metro Atlanta, according to a new report from Metrostudy.
In 2016’s third quarter, homebuilders started work on 5,541 new homes, an increase of 12 percent from Q3 2015. Even more, housing starts are up 15 percent on the year to 21,201, which is an eight-year high.
New home sales were similarly strong, rising 15 percent year-over-year and 16 percent year-to-date. So far in 2016, there have been 19,720 new homes sold in Metro Atlanta.
New home inventory remains low
Low housing inventory has long been a problem in Metro Atlanta’s existing-home market – by the most recent measurement, inventory is currently at a 3.2-months supply; yet, Metrostudy’s analysis found the supply issue is even worse for new homes.
Every 90 days, Metrostudy conducts field checks on new home subdivisions, and the company’s latest survey found that new home supply has been steadily dropping the past nine months, and now sits at just 2.4 months, lower than the normal level of 3 to 3.5 months.
Eugene James, Metrostudy’s senior regional director for Metro Atlanta, said low supply is the big downside to the current market, and that it impacts different levels of the marketplace.
“There is no doubt that the Atlanta housing market is strong and vibrant. The down side is that we don’t have enough houses to meet consumer demand, especially in the lower price points,” James said. “The lower supply of homes also keeps some people from being able to sell their existing home, thus they can’t move and buy a higher priced home. This is locking many people down into their existing homes, and prevents them from being able to sell. Meanwhile home prices continue to rise due to the housing shortage. It’s a vicious cycle.”