The Q1 Forecast for the 2024 Atlanta Real Estate Market

What is the forecast for the Atlanta real estate market in 2024? Contrary to most every regional and national prognosticator, the only legitimate answer is "it depends". It's critical to understand prior markets, look for patterns, and temper that with current economic conditions. The idea that any "housing" or "economic expert" can authoritatively declare where this market is headed over the year is absurd. How can variables like local and national economic conditions, consumer debt, consumer confidence, the Fed, global supply chains, wars and conflict and a hundred other wild cards be corralled? They cannot.

We can however, develop supported opinions by combining recent data, extensive local experience and cautious interpretation of the variables mentioned above. In other words, confidently infer what we expect to see. Small bites; it's best to look ahead in quarters and that's what we'll do. The focus is on the three main key indicators - How Much? How Many? How Long?. The six main Metro Atlanta counties are considered; Cherokee, Cobb, Dekalb, Forsyth, Fulton, Gwinnett.

Greater Atlanta Home Prices

Unlike so many markets, Atlanta was a model of consistency over the pandemic and post pandemic years. Values increased as they did nationally, but not irrationally as Atlanta wasn't a "zoom town". The ebb and flow here was hectic but the chaos and price swings impacting other markets was not felt here.

The high water marks of late spring '22 are visible
Rate shocks bottomed in late '22 and over'23 prices climbed back ending up in all categories

Peaks to current see about even list prices with 5%-5.5% drops in contract and sale prices
All categories saw positive growth out of the Dec '22-Jan '23 lows

Home prices for Q1 '24 into Q2 '24 in the greater Atlanta real estate market will be heavily influenced by inventory. Buyers have largely adjusted to the rates and the expectation is that the Fed will begin cutting by mid year. Spring typically sees listings jump, we will see it again this year. The variable will be how many listings are appealing, well priced homes. Those will be sought after, the overpriced less appealing ones will sit.

Number of Homes in Greater Atlanta

Listings typically trail contracts and closings, that's clear as listings ballooned as rates jumped. Listings settle around Feb '23 and as the year moves along, contracts and sales increase. That period of 8% rates hit in late '23 and that drop in activity is clear. Like prices, Atlanta was well ahead of most national markets in terms of pure numbers.

Sellers attacked the market in early ’22 looking to capture the buyer frenzy. As buyers receded, so did sellers
Despite the “low inventory” proclamations, every month over the last two years had more active listings than 12/21

May ’21 was a month where the most “units” combined were in play. While not the most listings, that month saw the highest number of contracts and sales.
From the peak, contracts and closings are significantly off. Many sellers continue to fish; offering homes that buyers continue to pass on.

The number of listings will increase in the first two quarters of '24, happens every year. We fully expect the number of contracts and sales to increase as well. Rates are in the mid 6%'s now (mid Jan) and appear to have largely stabilized. Atlanta is also entering the prime relocation season, transferees always provide a nice volume of motivated buyers and this spring will be no exception.

Housing Supply in Greater Atlanta

Sellers have enjoyed historically strong conditions, they still maintain an edge into '24. Months of supply (MOS) is broadly defined as the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. This assumes that no new listings are added to the market. 0-3 tends to favor sellers, 3-6 tends to be balanced, and 6+ tends to favor buyers. Days on market (DOM) between 60-120 tends to be a normal marketing time.

This a great snapshot of how volatile the last 24 months were
Marketing times were a similar roller coaster ride due to interest rate impact

Mar '22 saw historic low inventory, MOS is up 200% but still barely over 3
Days on market reflects buyers being more selective, still well under the "normal" range

We know listings will increase in the spring, we fully expect buyers to be active as well. It's expected that MOS will dip below 3 for Q1 '24 and likely to remain at or below that through Q2 '24. Fed chatter is for cuts but if rates remain in the mid-low 6% range, buyers should none the less be busy. There is no reason to expect any type of significant jump, we think MOS will remain between 2-4 months over this year.

The Atlanta Real Estate Market in 2024

As noted, this is a focused look at Q1 '24 into Q2 '24, it's unwise to look beyond this range. A few key takeaways that we're fully confident in predicting:

Overall:

The Atlanta market is strong, it will remain one of the top markets in the nation
Prices will not decline, inventory will not drastically improve
Q1 & Q2 '24 will be busy, sellers will remain in control but buyers will be active
Appraisal challenges are being seen do to the dearth of comps, be proactive

Buyers:

Expect rates between 6.15%-6.5% with possible easing as/if the Fed starts cuts around mid year
Competition will remain for well presented homes in desirable areas
Successful buyers will be focused, preapproved and ready to buy
CAUTION remains about overpaying, emotion must be kept in check

Sellers:

Seller will hold the edge, not as it was but the market remains tilted their way
Well presented, accurately priced homes sell. Overpriced trash will sit
Leverage the advantage with price and contract terms - but don't overplay the hand
Pay attention to the market trends, buyer habits, potential issues (appraisals) and be ready

Last and most important, work with full time, professional agents. The recent lawsuit verdicts, continued lawsuits, leadership issues with NAR and the bloated, agent population should be clear warning signs - RESEARCH AND VET YOUR AGENT!

Posted by Hank Miller on January 9th, 2024