As businesses temporarily shut down and joblessness climbed to Depression-era levels, home sales in the metro area plunged last month, according to a report from the Atlanta Realtors Association.
With the coronavirus pandemic raging in April, sales in 11 metro Atlanta counties were down 25.8% from the same month a year ago.
The housing market has shown signs of rallying in the first weeks of May, but it's nowhere near normal. Still, said association president Jennifer Pino, there's hope at least for a limited comeback this month with restrictions on many businesses loosened or lifted.
"With the removal of the shelter-in-place order at the end of April, activity has rebounded quickly," she said. "Pending sales project a strong summer market."
In the first week of this month, sales of new homes were 10% higher than they were during the same period a year ago and the number of resales was 7% higher, said John Hunt, principal at MarketNSight, an Atlanta-based housing research firm.
Some potential buyers will have trouble obtaining financing, but those who can get loans will have the advantage of very low interest rates, he said. "And they are going to be extremely low for a long time."
The year started with a surge of buyer interest in homes. Pending sales — that is, contracts to buy homes — were very high in the months before the virus-triggered shutdowns. Some of those contracts fell through as jobs were lost or buyers got cold feet about big purchases during such uncertain times.
But a surprising number of contracts were completed and homes sold, Hunt said.
The demand for homes never goes to zero," he said. "If 16% of the population doesn't have a job, that means 84% do have a job, and we don't have enough inventory for that 84%."
Inventory has been key. For several years, the Atlanta market has seen demand outpace the supply of homes for sale — especially among lower-priced houses that appeal to first-time buyers.
And, when buyers bid against each other, prices typically rise.
That mismatch grew worse last month: The number of homes listed for sale during April was down 13.4% from the same month a year earlier, according to the Realtors group.
That is partly because "quite a few home sellers" put their homes on "hold" status, which means they are still listed, but not available for purchase, said broker Torrence Ford, owner of Remax Premier.
"This created an opportunity for prices to rise," he said.
The median price of a home sold in April was $305,000, up 8.9% from a year ago, according to the Realtors' monthly report.
But the crisis also dampened the enthusiasm of many potential buyers of modest means, while better-heeled buyers stayed in the market, said broker Kristen Jones, owner of Remax Around Atlanta.
"First-time homebuyers may be more hesitant to buy during this time compared to someone who has owned a home before," she said. "Also, some may be in industries that have been hit with layoffs and furloughs."
Jones said that 7% of April sales at her firm were for homes priced less than $200,000. A year ago, that group accounted for 10% of sales.
Gwinnett County had the most activity in April with 823 homes sold at a median sales price of $277,000, according to the Realtors.
But Fulton had the highest prices, at a median of $405,000 for the 744 homes sold.
