The number of houses for sale last month in metro Atlanta was higher than the number for sale a year ago, signaling that the market may be entering a new phase, experts say.
After several years of steadily declining inventory, listings were up 10% in November over the same month a year ago, according to a report from the Atlanta Realtors Association.
Yet the number of homes that actually sold continued to decline, as it has for months.
For a long time, experts had attributed the drop in sales to a lack of supply: There just weren't enough homes for sale. But now, it seems that potential buyers are lukewarm about the market.
"The lack of sales now is a demand problem," said Brad Dillman, chief economist for Atlanta-based Cortland, a real estate investment company.
Buyers in recent months had seen higher mortgage rates and only modest addition to supply, he said. "Mortgage rates did decline in November, and that may augur well for the months ahead."
Years of limited supply had created a "sellers' market," where potential buyers often bid against each other and prices went up. The supply of homes was half of what experts say is needed for a balanced market, where buyers have equal negotiating power. And the median price of a home climbed more 7.3% from a year ago in the 11-county area covered by the Realtors report.
Without the added supply of listings last month, the median price of a home would have climbed more, said Bill Murray, president of the association. "New listings have risen the past few months, which has helped moderate price growth."
Prices have been rising much faster than typical household incomes in the area.
The median sale price in the region was $263,000, the report said.
Atlanta's home prices consistently have risen faster than the national average — and that is a problem for people with modest incomes, said John Rainey, vice president at Remax of Georgia. "Affordability continues to be a growing concern for many who are looking to purchase a home."
The market is "rebalancing," he said. "We are beginning to see a shift in the local housing market. As prices and interest rates continue rising, buyers are pausing to see what happens next."
The number of sales fell in all five core counties, Remax said.
With 817 home sales, Gwinnett had the most transactions, with Fulton's 709 in second place. But Fulton had the highest median home price: $355,000.
For all the homes that sold last month, 69% of them sold below list price and most of those sold for at least 2 percent below their listing price, according to Rachel Rampino, a spokeswoman for Knock, a company that buys from sellers, then manages the listing.
"Buyer demand continues to be low because prices are still too high," she said.
