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| In Atlanta, Location Matters More Than Price Range |
| Written by Jonathan Smoke | |
| 09.05.2007 | |
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Discuss this article on the forums. (0 posts) If you read my posts, it won’t take you long to recognize the theme that location-specific conditions influence much of what matters in housing performance. But even if you understand the importance of location, you are often faced with the problem of finding reliable housing intelligence on a truly local basis. As market researchers focused on housing, we struggled for years to find reliable information that could reveal neighborhood-level insights like price trends, builder activity, new home price premiums, and who’s buying. Once we found a way to do this, we’ve been working on a way to provide such insights to others.  We are currently assembling the data as well as refining and testing an application called Neighborhood Insights, which we hope to make available through Housing Intelligence in October. We’ll talk a lot more about the application as we get ready to launch it.In the meantime, a fortunate result of our testing is that I have the opportunity to drill into lots of interesting data to highlight what’s going on in this turbulent market. Today I decided to look at the Atlanta area. Median home prices have remained steady and have increased in Atlanta through July, but permits and home sales are off sharply, especially compared to highs achieved in 2004-2005. Atlanta was a late comer to the housing slowdown, but then again, it didn’t exactly participate in the boom either. So I wondered if prices remained steady in all areas of Atlanta. Then using Neighborhood Insights, I ran a simple report to look at average home prices by zip code in Atlanta from 2004 through May of this year. Then I identified the zip codes where prices have gone up each year, including the transactions reported so far in 2007. As you would expect, 2007 is where we lost a lot of the zip codes. According to our data, average sale prices in 2007 have declined about 3.5%. As a result, only 25 zip codes, or just under an eighth of the zip codes in Atlanta, could live up to the test that average prices of all home sales have increased each year since 2004. These zip codes are pictured below. )) I expected to see only higher priced affluent zips represented, but instead the 25 zip codes represented a kaleidoscope of the Atlanta market across numerous price points and across a broad geography. The Google Map shows average price ranges. The ranges start at $100,000 for the dark blue flat areas and increase in price up to the tallest and bright red areas where average prices are above $400,000. The average prices in these strong zips cover every price band between $100,000 and $500,000. In the Atlanta market, the current median home price is approximately $175,000 and the average is $217,000. Even this simple analysis shows that there is pricing strength in average, below average, and above average price points. The geographies represent urban areas inside Atlanta’s perimeter as well as far reaches of some of the outer suburbs where affordability is the strongest. To be fair, zip codes still mask a lot of variation. However, if you were to drill into the supply and demand in these areas you would likely find the core strength that is keeping the median price very sticky in the broader Atlanta market. 
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