About two years ago this month, Atlanta real estate and interest rates started a very complex relationship. The Fed slammed the brakes on low rates, and despite the initial wobble, the Atlanta real estate market found stability and firm ground. There was pain of course, many buyers were eliminated and the withdrawals from those low rates is still being felt. Two years in, we have enough data to evaluate the impact of the rate jump; the questions of “how much, how many, and how long” can be answered at this point. Comparing Feb '24 to Feb '23 and Feb '22 (six main metro counties); we see how hard those rate increases hit in '22 and how the market adjusted through '23.

Home Prices in Atlanta Continue to Rise

Median prices fluctuate as they do in every market, but there was no crater and there won't be. Prices across all categories are up; the last year demonstrating more modest increases than the two year look back. This moderation was expected and needed. We now have fewer buyers, less chaos and more time for buyers to consider their purchase.

  • 2YOY - List +11.2%, Pending +12%, Sold +10.6%
  • 1YOY – List +6%, Pending +6.9%, Sold +8.7%

Greater Atlanta remains one of the strongest national markets, home values are not likely to drop over the next several months. While we won't see the 3% again, under 7% is still a good rate and reasonable when considered over the last few decades.

Home Sales Drop in Atlanta

From a pure "number of transactions" point, closings and contracts cratered in '22 as buyers rapidly fell out and sellers chased those that remained. '23 saw a less severe drop in contracts and closings, sellers also recognizing that bull run was over. The reduced buyer pressure and less competition (in some cases) allows for a more deliberate approach. Those sellers that adjust find success, the others...not so much.

  • 2YOY - Listings +23%, Pendings -35.5%, Closings -44.6%
  • 1YOY - Listings +7%, Pendings -17.6%, Closings -25%

Of course numbers are down from Feb '22. After the shock of rate hikes, things settled in '23; still dropped but that pace prior to the rate hikes was unsustainable. 

Inventory Favors Sellers, but is Balancing

The rate bumps literally shocked and froze the market like Wiley E. Coyote suspended a second before falling into the canyon. A balanced market tends to have 3-5 months of inventory, this was down to 1.1 in Feb '22. The drastic increase 2YOY reflects the impact of rate hikes. 1YOY we see them still down, but greatly easing as the market adjusts. Months of Inventory is easing into the lower end of a balanced market.

  • 2YOY jumped 165.7% from 1.1 to 2.9
  • 1YOY jumped 44% from 2.0 to 2.9

There was nowhere to go but up, this is still a market leaning towards sellers but working toward balance. In other words, this market is normalizing. We expect sellers to retain the slight edge as 24 progresses.

SO How is the Atlanta Real Estate Market?

So how do we answer the “how’s the market” question?  We’re working through the challenges better than most markets. Our market is on solid ground and both buyers and sellers are acclimating to the current economic conditions. Key points:

  • First and foremost, no one can accurately "time the market". Buy or sell when it's time, be smart and work with pros.
  • It was about this time in 2022 when rates jumped. On 3/3/22 rates were 3.76 and just before Thanksgiving they were over 7%. We are now two years removed from the pandemic influence and the chaos of Spring ’22.
  • Economic turbulence remains, the Fed seems likely to wait to cut rates. Could be into Q3 ’24.
  • Mortgage rates (30 fixed) continue to fluctuate, the last several weeks in the mid to upper 6% range. It’s reasonable to expect rates to remain in the mid 6% range.
  • Buyers remain engaged. While they continue to look for rates to drop, they are moving to buy if the right home is found. Preparation and decisiveness remain the key to success.
  • Sellers with well-presented accurately priced homes are seeing strong competition and multiple offers. Those overpriced and poorly presented homes languish.
  • The broad patterns are good indicators of local trends, However, it’s critical to look at data for the immediate area and price point. Each local market/price point can tell a slightly different story.

Buyers are the "canary in the coal mine"; first to react as conditions change. Sellers tend to consistently be late to react, invariably taking the stance "yeah but my home is the exception...". We don't expect any major changes through '24; we expect rates to remain in the 6-6.5% range and prices to modestly increase 3-6%. The split between desirable and "also ran" listings is very stark; the buyers will pounce on the desirable ones and avoid the trashy ones. 

A last and earnest suggestion - do not blindly swallow anything put out by the MSM. The majority of these positions are idiotic; their objective remains to get clicks and eyeballs. The flip flopping is dizzying; positions and screaming headlines change, change back, and change back again. The greater Atlanta real estate market is stronger than most, and remains competitive. The most successful clients recognize the challenges and work with seasoned professionals. That is the difference maker - working with seasoned pros. 

Posted by Hank Miller on


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