May Intown Market Report
By Bill Adams, President
The numbers in our May 2025 Intown Market Report are a continuation of a theme we have experienced for the last two years. Prices continue to increase, the time on the market is increasing and the number of transactions continues to fall. For the overall market, this month, the Average Sales Price is $818,171, a year-over-year increase of 11% and a 16% increase in the last two years. The Average Number of Days on the Market is 41 days, a 21% increase from last year and a 35% increase from two years ago. Finally, 1,374 properties sold over the last 12 months. This is a 10% decrease in transactions over the last year and a 21% decrease in sales in the last 24 months.
This month, I would like to compare Census Data, Average Sales Prices and current mortgage rates to analyze the disconnect, if any, between household income and affordability within a community. The subjects are my two favorite Intown Atlanta communities: Grant Park, where I grew up and where our office is located, and the City of Decatur, where my family has lived since 1996. We will look at Average Household Income (AHI) and Average Sales Price (ASP) to see if the family income can support the price of a single-family home in the community. I will assume that a purchaser will have a downpayment of 10% of the purchase price for a 7%, fixed rate, 30-year home mortgage with a Front-End Debt to Income (DTI) Ratio of 25%. A 25% Front End DTI Ratio means that 25% of a borrower’s income would cover the monthly Principal and Interest payment on a loan.
In these comparisons, I am using income and sales price averages. In both Decatur and Grant Park, prices and household income deviate from these averages. What this exercise seems to validate is that house prices are rising faster than household income in these communities. This is no great surprise as many economists over the past few years have reported that the price appreciation of single-family homes has exceeded wage growth.
Next month, I will study the other 37 markets in our Intown Market Report to see if I can find a community where there is little or no gap between what the Average Household Income can afford and its Average Sales Price.
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