Parts of Atlanta are experiencing something almost unimaginable just two years ago — a shortage of homes to buy.
In Buckhead, one of the most affluent parts of the city, opportunities to find existing homes between $500,000 and $1 million are limited, residential real estate executives say.
Chances to find lots to build new homes are “basically nonexistent,” said homebuilder Jim Chapman of Jim Chapman Communities Inc.
The company has nine homes in various stages of development in Buckhead.
None are less than $1 million.
“I couldn’t buy a lot where I could afford to build a home for less,” Chapman said. “Those lots don’t exist in Buckhead. If they do, they are in parts of Buckhead where fewer people want to live.”
Metro Atlanta’s housing market still has pockets that have failed to recover as quickly, including South Fulton, Clayton and parts of the region farther from the city’s core where sales and price appreciation remain sluggish.
But, for intown Atlanta, sections of the northern Perimeter, and cities along Georgia 400, dwindling inventory reflects how quickly things are turning for one of the nation’s most beleaguered housing markets.
The shortage began to develop last year when, after several years of scraping along the bottom, the housing market started to regain momentum. Now a dearth of existing intown homes priced at less than $1 million is becoming routine, homebuilders said.
In Buckhead, a ritzy part of the city that avoided the steep price declines and waves of foreclosures of recent years, some homeowners are finding hand-written notes in their mailboxes.
The message: “We’ll buy your house,” said Ben Hautt with Stream Realty, who has received one of those notes in his own mailbox. “They can’t find anything on the market.”
In recent months, some people who sold their Buckhead homes too quickly were unable to find a new one.
“They had to move to a temporary home,” said David Boehmig of Sotheby’s Atlanta Fine Homes.
In April 2011, 449 Buckhead homes between $400,000 and $800,000 were listed for sale, according to data from First Multiple Listing Service, or FMLS.
By April of this year, only 206 were on the market.
“Active listings dropped 54 percent,” said Michael Rogers, president of Dorsey Alston Realtors.
Buckhead inventory has plunged41 percent from February to April of this year, versus the same period a year ago, Boehmig said. Sales have jumped31 percent during that period.
In some parts of intown Atlanta, Realtors describe a sellers’ market.
“Buyers have to prepared to respond quickly,” Boehmig said. “It’s not uncommon for a property to have multiple offers.”
The activity is fueling a resurgence in home values.
Metro Atlanta’s home prices continued soaring in March, according to the latest S&P/Case-Shiller Home Price Indices. The area saw a 19.1 percent year-over-year jump in home prices for March and 1.3 percent growth from February to March, according to the monthly report.
Nationally, home prices were up10.2 percent annually and 1.2 percent from February to March.
Atlanta mirrors similar trends in other U.S. cities. When the housing market was crashing between 2006 and 2009, development practically shut down. That created an opportunity to absorb existing homes, but almost no new supply was added.
“There was a real decline in land development,” said Robert Denk, a senior economist at the National Association of Home Builders. “Now we’re seeing a shortage of lots all over the country.”
An unfortunate feature of the past housing bubble was pushing development too deep into the suburbs, well beyond the reach of the city, Denk said.
Now, development is moving closer to urban areas.
“Atlanta is an exception to other cities, such as Washington, D.C., because it still has land available in the inner parts of the city,” Denk said.
That could set the stage for parts of Atlanta inside the Perimeter to see greater demand for new homes.
In Brookhaven, homebuilders could acquire lots for about $150,000 two years ago. “Now it’s closer to $350,000,” Chapman said.