MARKET TRENDS: Is Atlanta experiencing another housing bubble?
Thanks to relative affordability, Atlanta is one of the few markets in the country where buying might just be more popular than renting. Thanks to sky-high demand, in most places, the market has emerged from the recession to be a seller’s paradise, with talk of bidding wars and houses (in the right location) sometimes selling for over asking price. But a new report by Collateral Analytics suggests that we might be setting ourselves up for a slump, with Atlanta dubiously ranked at No. 2 on the list of “Top Ten Overvalued Markets.” At 13.3 percent overvalued, the Atlanta-Sandy Springs-Roswell market sits just behind Sacramento (at 14.9 percent) and well above the national average of 4 percent, according to researchers. So what’s that mean for us?
The report caught the attention of Barron’s, which called the markets in question “generally… the most volatile in the country and quick to overheat,” which doesn’t sound like a good thing. But a little context goes a long way.
Nationwide, during the 2006 boom, homes were overpriced by about 15 percent. But back then, some of the largest markets went well above 50 percent overvalued, according to the report, so today’s numbers might not be so scary in the grand scheme of things. Still, as Atlanta’s market continues to climb, we might take the growth with some wisdom gleaned from 2007… or not.