By Bill Adams, MBA, CCIM, ALC, CRB, Founder, Adams Realtors
For our November Intown Market Report, the Average Sales Price on a home in this month’s survey came to about $684,193, which is a 12% increase in value over the past 12 months. The Average Number of Days on the Market continues to be well below normal at 27 days, which is a decrease of 14% from last year. With only 2,164 houses sold over the past 12 months, the Number of Units Sold continues to fall, decreasing by 14%. And of the 39 markets tracked in this survey, only two — Cabbagetown and Reynoldstown — experienced a decrease in value. In each case, the decrease was 1% of the Average Sales Price.
In reviewing our November survey, I was surprised by the number of neighborhoods with an Average Sales Price of more than $1 million. There were eight neighborhoods that were in the million-dollar-plus category this month alone. With an Average Sales Price of $2,037,623, Ansley Park was the most expensive community with the next seven neighborhoods as follows: Virginia Highland at $1,301,405, Midtown at $1,278,909, Morningside $1,236,810, Druid Hills at $1,176,547, Poncey-Highland at $1,127,818, Inman Park at $1,112,391 and Glenwood Estates at $1,022,700.
To give you an idea of what these prices mean, purchasing a home in Virginia Highland at the Average Sales Price of $1,301,405, making a down payment of 10% ($130,141) and securing a 30-year loan with an interest rate of 6%, the monthly payment would be $7,020. In order to afford such a mortgage payment, a buyer would need to earn a household income of around $350,000 to buy a home in Virginia Highland.
My personal benchmark for an affordable house is a house price of $250,000 and under. Unfortunately, none of the Atlanta Intown neighborhoods that we surveyed are at or under that price point.
Out of the 39 markets in our report, the most “affordable” market is East Point, with an Average Sales Price of $288,482. If a buyer purchased a home in this market at the $288,482 average with a 10% ($28,848) down payment and a 30-year mortgage at 6% interest, the monthly mortgage payment would be $1,554. The household income would have to be around $75,000 to be able to purchase a home in East Point.
As you can sadly see in both examples, the Intown Atlanta market continues to be unaffordable for a large segment of our workforce. Even with a possible recession on the horizon, I do not see this changing in the foreseeable future.
