Atlanta Housing Market At A Glance
It’s no secret that the Atlanta housing market has been on fire for the last two years. The cause? Historically low mortgage rates and the coronavirus. People tried to flee largely populated areas to get to the less dense suburbs. Current homeowners didn’t want to sell their current property, and new construction was down due to a lack of labor, all leading to a shortage of homes, new and existing. So what does the rest of 2022 have in store for the housing market?
Home Sales Are Slowing
Two significant factors are slowing home sales right now: rising interest rates and more homes are coming to market. It looks like the seller’s market is turning more to a buyer’s, or at least becoming a more stable, normal real estate market.
Kam Williams recently stated this in Atlanta Magazine:
The days of having a listing come on at 5 o’clock, and having to see it by 5:05, and having 40 offers on one property—we’re not having that anymore,” she says. “Now buyers are a bit relieved. If they see something, they don’t have to run out in the next two seconds
This leads us to our next question that has a lot of people concerned –
Are We Headed For A Crash?
Many people are worried about another crash like that of ’08. In fact, Google trends show that more people are searching the term “housing crash” and similar terms more than at any time since ’07.
If you listen to the news, it’s all gloom and doom, but the market data doesn’t support it. Some experts predict a housing market correction.
The housing crash of ’08 was due to banks’ loose lending standards and an overabundance of homes. Banks aren’t giving out the risky loans they did years ago, and foreclosures still remain low. Housing inventory still remains critically low overall. However, metro Atlanta’s housing inventory rose to its highest level since September 2020. This gives more proof things are turning in favor of buyers.
Again, what we are seeing is a return to a normal market.
What’s Making The Market Turn?
Rising interest rates are a real problem for some would-be buyers. Prices of homes are still extremely high. The median price for a home in Atlanta is over $400,000, the price alone is driving out a lot of young and first-time homebuyers, and rising interest rates only exasperate the problem. For instance, a 2% rate increase from a fixed rate of 3.5% to 5.5% on a $300,000 home would mean an increase in monthly payments of over $350.00. So, in theory, this will affect buyers on the lower end, having less inventory and competing with other buyers wanting the same property.
What’s Ahead For The Rest Of 2022?
We wish we had a crystal ball, but we don’t, so all we can do is follow the market data.
Housing inventory remains extremely low. Many would-be sellers don’t want to sell because of rising interest rates and lose the low 3.5% rate they have now. However, people will become used to the higher interest rates and continue to buy. If you need to move because of a job transfer, it’s out of necessity, not luxury.
Rising interest rates will definitely slow new home construction. The data is already showing fewer permits being pulled for new home construction.
We think things will continue to slow, especially if interest rates continue to rise. Rising interest rates are the only hedge the Fed has against inflation. Inventory remains extremely low, which will keep prices high, but we will see a small correction in prices as we are already seeing sellers having to lower their asking prices in some areas.
As a reminder, if you have a home that you have inherited, are a tired landlord, have a house that is ugly or pretty – we would love the opportunity to make you an offer on it, just get in touch with us!