MarketNsight reports 2020 Atlanta new pending home sales are up 19% over 2019 sales through August of this year. Monthly year-to-year increases over 2019 were 28% in May, 31% in June, 38% in July and 42% in August.
“As we have mentioned before, the double-digit increases for housing demand started in May of last year, months before the pandemic,” MarketNsight and ViaSearch President John Hunt said. “Before that, housing demand was moderating sharply in Atlanta and across the nation. Atlanta saw year-to-year permit increases drop from 8% in 2017 to 5% in 2018 to 0% in 2019.”
MarketNsight data shows that since May of 2019, even with a pandemic, new pending sales are up 20%, and new closings are up 15%.
New pending sales have now been positive year-to-year for a total of 25 weeks and negative year-to-year a total of seven weeks. Of those seven weeks, six coincide with the pandemic – March week two through the third week of April.
The pandemic narrative for both new and resale homes tells an interesting story. Since turning positive, resale pending sales have been up 21% on average. New pending sales have been up an average of 35% since turning positive.
Lack of supply, low interest rates and government stimulus have all played a role in the dramatic recovery for housing since late April of this year. Pending sales (the leading indicator) turned positive first, dragging closings and eventually permits with it. But permits have been very slow to recover.
“I believe we are and have been, in a perpetual state of undersupply for new construction and housing in general,” Hunt said. “It may last for another decade or longer. Most economists also believe that interest rates will remain very low for a long time.
“As many of our customers have conveyed, the inability to meet demand with enough supply at the right price carries its own problems, but it is far better than having too much supply and no demand like 2008.”
MarketNsight is focused on helping home builders and developers make smart decisions related to purchasing land and pricing product. Its groundbreaking Feasibility Matrix® systemizes the decision-making process and creates a one-stop-shop for gauging new home community feasibility including ranking by builder and subdivision and developed lot and raw land sales.
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