It’s a seller’s marketIf there’s one thing a buyer, seller, or investor should keep in mind in the Atlanta residential real estate market at the moment, it is that Atlanta is a seller’s market. Atlanta’s residential market has always had a fairly low supply and favored sellers over the years, and this trend has only been exacerbated by the pandemic. Single-family dwellings in particular are in short supply, and the Atlanta REALTORS Association’s January 2021 report notes that new listings totaled 6,679 in January 2021, down 19.4% from 2020, and active listings are at 8,133, a 45.5% decrease from 2020. There’s just a little over a month’s worth of inventory. Normally, the supply of homes should be good for six months. In short, demand continues to outstrip supply.
Home prices will continue to riseEven in the face of an economy crippled by the pandemic, home prices continue to rise given the high demand in the Metro Atlanta area. Zillow’s Home Value Index for Atlanta in Feb 2021 is at $313,818, a 6.9% increase over the past year. The continued effects of the pandemic and the trend towards remote work are also likely to spur demand in Atlanta’s suburbs, as offices in central downtown locations become less essential to working effectively. People who work from home will look for spacious homes in areas that promise opportunities for outdoor recreation. Another important indicator is the sale-to-list price ratio, which stands at 98.97%. That means that almost all the homes sold in Atlanta sell at or close to their list price, a consequence of strong demand and likely a sign of competitive bidding among buyers. Rising lumber costs, the challenges of construction in a pandemic environment, and the reluctance of homeowners to sell their property mean that supply is likely to stay low. Thus, sellers who are ready to put their homes on the market stand a good chance of getting a good price for their property.
Interest rates are expected to riseWhile Atlanta home prices are expected to continue rising in the near future, historically low interest rates mean that it’s also easier for buyers to secure mortgages at reasonable terms. These low rates take some of the sting out of mounting house prices – if you’re prepared to take advantage of the opportunity. You might want to move fast, however, if you want to secure the best rates. The Mortgage Bankers Association’s January 2021 forecast sees rates beginning to climb back up again as local economies recover. Homebuyers prepared to pay in cash and armed with the right information stand a better chance of securing the home they want. If you wait things out, be prepared for higher rates without substantial improvement in supply or a drop in prices. If you can hurdle the higher asking price and a possible bidding war, then you’re in luck. Atlanta boasts the following:
- Lower cost of living compared to major metro areas like New York or San Francisco
- Consistent population growth
- More than 1.2 million jobs over the next 30 years
- Growth in the following sectors:
- Health care and social assistance
- Professional, scientific, and technical jobs