One of the primary reasons that we’ve seen such a dramatic increase in home prices in Decatur is the diminishing inventory. Supply has been overwhelmed by demand, and as the pool of buyers interested in Decatur has outstripped the pool of sellers we’ve seen a drastic reduction in available properties. The chart below spells out the trend pretty clearly:
It’s pretty stunning when you consider that in April of 2010 there were 184 homes for sale, and this past month only 82. That’s a reduction of inventory of 55%, which has caused a substantial impact at the price register for home buyers. The market simply cannot supply the demand with enough houses to slow down price appreciation.
It’s impossible to predict what’s next, but considering that the City of Decatur has fixed borders and builders are already struggling to keep up with demand, it is unlikely that we’ll see a dramatic rise in inventory any time soon. A rate increase can always tamp down home buying fervor, but it doesn’t seem likely that one is around the corner. Alternative markets like Kirkwood, Druid Hills and Medlock Park may siphon off some buyer interest, but up until this point it doesn’t appear that any of these markets have made a dent in buyer demand for Decatur.
It doesn’t matter whether you live in Detroit, Denver or Denmark: home buyers want to move to an area with fantastic schools, a close knit community, unfettered access to mass transit and pedestrian friendly streets. It’s no different in Metro Atlanta, which is why Decatur’s inventory is shrinking and its prices are rising. Hard to say where it goes from here, exactly, but for the time being, it’s better to be a seller in Decatur than a buyer…
Data Source: First Multiple Listing Service