It’s with a MASSIVE dose of “we think” that we offer our latest opinions (12/16/21) for the first quarter of the 2022 North Atlanta real estate market. It's not a rosy outlook; expect home buyer frustration to increase in 2022. Rates are likely to increase as the Fed just responded to the record high inflation, planning at least three rate bumps for 2022. The prognosticators are out there already making bold claims; you can find the overt optimists and you can find the dark pessimists. So what's in store for home buyers and sellers that have to make a move this spring? Well given this environment, we’re not going to look much past the first quarter or so. Buyers will again be challenged and sellers will reap the reward…until they become buyers. As usual, preparation on both sides is critical.
A few caveats; everything real estate is hyper local. The charts below are broad, but you need enough data to show trends. This view often mimics what we see at the tactical level, but everything must be taken with a grain of salt. We all realize that further and more specific analysis may show different results. And with that….
A Return to Normal?
Real estate has pretty predictable cycles, we all know them. Well that was until about Mid-March of 2020 when all hell broke loose. The Jan/Feb inventory bounce always happens; and it did in 2020 until the world stopped. The bump kinda sorta returned in 2021 but what happens in 2022? Let's look at history. See the inventory bumps as we head into the first quarter? Even 2020 started as it should until the bottom fell out. Will 2022 be a return to the normal pattern? The charts for cities in North Fulton, Cobb and Forsyth...
Right now (mid Dec 2021) we’re dragging the bottom for inventory; we're finding old shipwrecks, dead fish, plenty of garbage and a few Mafia bodies. Home buyers are not happy looking at stale, overpriced or otherwise compromised homes. Home buyers are teed up and ready to write…once something decent pops. Is new construction the answer? Probably not. Supply chain issues, cost of land and labor, permit and paperwork delays (blame it all on Covid) and more will likely take a year to straighten out. Our recent new home buyers have completion dates of 10-11 months out. We'll be out there weekly, we keep a close eye on our builds. The charts don't show a promising first quarter...
So What’s a Buyer to Do?
We’re NEVER one of those agents that spur buyers to “buy now”; our job is to counsel, not convince a buyer to act before they’re fully confident. That position won’t change, but there are a few factors will significantly impact home buyers during the spring of 2022.
- Buyers will again compete for the most desirable listings. The well-presented, move in ready, highly desirable homes will disappear rapidly. Right now there’s little to chase, whatever inventory spring bump there is won’t balance the market.
- Rates will move up, they have to or we’ll be a third world country in a few years. Today (12/16/21) there was continued chatter about the Fed acting to combat historic inflation, mortgage rates will be impacted and rise.
- A rise in rates will reduce buying power; logic dictates that buyers want to avoid that – which means the first quarter is likely to be very busy.
- Smart sellers of desirable homes will exploit this and push prices adding to the maelstrom. We already know some buyers will bite.
- No doubt that we’ll be reigning in a few buyers. We get it; everyone is paying retail plus but there comes a point….
So the answer to the question above is:
- Define success. What characteristics does your home have, what’s it cost and where is it? Be flexible.
- Get approved for a mortgage or get the cash ready, BEFORE you get on the hunt.
- Work ONLY with experienced agents that understand data, trends and how to write and manage contracts. Redundant, but it’s probably the most important thing.
- Be reasonable with your expectations, but don't ignore potential issues.
- If you are a battered and bruised buyer from 2021, expect more of the same. However, YOU should have learned already; sometimes it pays to get the deal done.
- Those buyers that missed in 2021 now have to deal with further price increases and rising interest rates.
We have several buyers circling; every one of them is frustrated and salty with good reason. Many of them missed an opportunity or two at good homes that got away for any number of reasons - some we terminated. Others continue to wait for the perfect home or are trying to time a sale and the purchase of the next home. Others are chasing new construction, hesitating and watching builders continue to raise prices seemingly at will. Builders won't blow a chance to raise prices.
We can’t control this environment but we can control how we deal with it. We take this business personally; sounds cliché’ but it’s not. Several of you know this; we worked or are working together for months – a few of you over a year. We understand the frustration but we’ll never compromise our integrity or sell you down the road, we won’t ever suggest a deal that we wouldn’t do ourselves.
The Hank Miller Team puts 30+ years of full time sales & appraisal experience to work for you. Act with complete confidence & make sound, decisive real estate decisions. 678-428-8276 and email@example.com
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