If you’re trying to keep up with home prices in Atlanta, the media coverage can be overwhelming and confusing. One reason for this is the type of data being used and what’s being highlighted. To compare home prices over different time periods, two methods are typically used: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here’s a brief explanation of each to help you make sense of the information.
Year-over-Year (Y-O-Y)
- This comparison measures the change in home prices from the same month or quarter in the previous year, so you can see how prices have changed over a one-year period. For example, if you’re comparing Y-O-Y home prices for April 2023 in Atlanta, you would compare them to the home prices for April 2022.
- Y-O-Y comparisons can be useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating, providing a more comprehensive view of long-term trends.
Month-over-Month (M-O-M)
- This comparison of home prices measures the change from one month to the next, providing valuable insight into the Atlanta real estate market. For example, if you’re comparing home prices for April 2023, you would compare them to the prices for March 2023.
- M-O-M comparisons are useful for analyzing short-term movements and fluctuations in price and can be used to track shifts in demand and supply, seasonal trends, and the impact of specific events on the market.
Distinguishing Y-O-Y and M-O-M Comparisons
When comparing metrics, it’s important to understand the difference between Y-O-Y and M-O-M comparisons. While the former measures year-over-year change, the latter tracks month-over-month change. Depending on your analysis’ specific purpose, both approaches have their own benefits.
Why Is This Distinction So Important Right Now?
We’re about to enter a few months when home prices could possibly be lower than they were the same month last year. April, May, and June of 2022 were three of the best months for home prices in the history of the Atlanta, Georgia housing market. Those same months this year might not measure up. That means, the Y-O-Y comparison will probably show values are depreciating. The numbers for April seem to suggest that’s what we’ll see in the months ahead
That’ll generate troubling headlines that say home values are falling. That’ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that home values are currently cascading downward here in Atlanta.
However, on a closer look at M-O-M home prices, we can see prices have actually been appreciating for the last several months. Those M-O-M numbers more accurately reflect what’s truly happening with home values: after several months of depreciation, it appears we’ve hit bottom and are bouncing back.
Why Does This Matter to You?
Despite negative headlines about home prices, the Atlanta real estate market has seen a recent uptick in prices. Although there may be a year-over-year decline due to comparison with last year’s record peak, the more immediate, month-over-month trends show prices are on the rise. This presents an opportunity for buyers to purchase homes at a discount before prices begin to increase even more. Buying at the bottom can be advantageous for those looking to invest in the Atlanta real estate market.
Bottomline
Let’s connect if you want to stay updated on the latest trends in the Atlanta real estate market, or if you’re interested in buying a property before prices increase further.