Atlanta Housing Market Remains Steady
The Atlanta housing market is a diverse, thriving mecca for home builders, even in the midst of a worrisome national slump in home sales.
New first-time home buyers arrive in the city every day, generating a big pool of potential new home sales. This and factors such as inexpensive land and affordable homes make the Atlanta housing market something of an anomaly.
But Atlanta is nevertheless prone to the same contractions that have slowed the national scene: foreclosures are putting more homes on the market, and houses are taking longer to sell as builders drop prices to generate more sales.
“Atlanta still has solid fundamentals,” said economist Patrick McPherron of Economy.com. “But I think Atlanta will be facing some problems as well. There is no market that is safe.”
Unlike most metro areas around the country, Atlanta supports a panoply of home builders who jockey aggressively for home loan applicants with houses under $250,000, which account for a majority of home sales here.
Real estate analyst Steve Palm of Smart Numbers, a database that provides information to builders, called Atlanta’s market “extremely fragmented.”
“The builder with the most market share has about 3 percent,” Palm said. “It’s not like that in other markets.”
David Ellis, executive V.P. of the Greater Atlanta Home Builders Association, said the top 10 builders in metro Atlanta control about 18 percent of the new-home market. In other markets, the market share of top companies is much higher.
In Orlando, the top 10 builders command almost 50 percent of the market and the top builder controls almost 12 percent of the market, according to the latest figures from the National Association of Home Builders.
But in Atlanta, where 2,000 builders provide housing for would-be Georgia home loan applicants, small, local home builders can hold their own against the national companies like Pulte, D.R. Horton and Centex.
“There are lots of smaller builders taking up market share,” Ellis said.
Atlanta-based Beazer Homes, the nation’s ninth-largest home builder, doesn’t even appear in the list of the metro area’s top 10 builders, while regional companies such as John Wieland Homes and Neighborhoods and McCar Homes do.
Nationally, the housing picture has been grim. Only stubbornly optimistic analysts say the worst is over. New home sales in February were down 18.3 percent from a year ago — the lowest pace since August 2000.
More ominously, the slide has been accelerating: In the past three months, sales have been plummeting at a 43 percent annual pace, inventory is up and housing starts in February were 33 percent below February 2006.
About 177,000 “housing-related” jobs evaporated in the past year, McPherron said. “And we are expecting to keep giving back jobs.”
Despite low Georgia mortgage costs, jobs will continue to be lost by the time housing bottoms out sometime in 2008. Still, Atlanta has reamined a popular destination with a growing economy.
Prices in places such as San Diego have put homes beyond the reach of ordinary home buyers, while Atlanta is still viewed as affordable.
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