As we enter the final weeks of 2022, the national real estate market is catching its breath. Some markets remain in flux, others have started to level off already. Atlanta is one of the steady ones, and housing inventory in Atlanta will not jump in 2023. This is due to several reasons and while 2023 will likely continue the post pandemic “malaise”, the Greater Atlanta housing market remains one of the most stable in the nation. Greater Atlanta did not “zoom” up in value and activity. It went bonkers to be sure, but not to a completely unrealistic point. The region has been growing consistently over the last decade and while the bump was experienced, there is solid footing which will keep this market stable.
Atlanta Housing Inventory
Everything must be kept in context. The national media gets eyeballs and clicks with doomsday headlines, easiest way is to compare everything to historic highs. That’s by design and it's disingenuous and misleading. When rates were low and prices were rising, headlines screamed that no one could afford a home. As rates rise and prices ease, the headlines report that no one can afford a home. Ignore the noise, look at the micromarket data. The charts below show the number of homes for sale in the “Atlanta” market looking back three years by quarters and one year by month.
Q3 ’22 is about even with Q1 and Q2 of ’21 and remains below levels of 2019 and 2020
Diving into last twelve months, we see a drop in inventory since the Aug peak and just an increase of 11% in active listings since Oct ’21. We clearly see the impact of the interest rate hikes as they suppressed buyer activity.
Influencing the Number of Atlanta Homes for Sale
Several factors combine to influence the number of homes for sale in a market. There are a few key things to consider around Atlanta for 2023. A few things to watch.
Interest Rates – A large number of owners refinanced during the pandemic and locked rates below 4%; a significant number at or below 3%, why would they give up those fixed rates?
Renovations – Cooped up in their homes, renovations and updating became a thing to do. Owners refinanced and/or took HELOCs and did the work often talked about. Why move now?
Equity – Homeowners gained a massive amount of equity during the last few years, that’s eroding as prices balance. While that “take it and run” mentality was popular earlier, owners now tend to be more settled and less willing to “toss the dart” and list.
Balance – as the market returns to a more consistent pattern, sellers will be back to 2-4 months on the market, concessions, and a protracted listing period. The inconvenience of selling returns.
Atlanta Economy – the greater Atlanta area is one of the more desirable locations in the country. The number of corporate transferees and very strong job market provide a consistent supply of buyers. Properties that list will get eyeballs.
New Construction – inventory is catching up but a shortage remains and builders will not be fully back online for several quarters
The Economic Wildcard
The economic situation is gaslighting at it’s finest; job layoffs, surging fuel and food prices, record personal debt, inflation not seen in four decades…yet the economy is “strong” in the eyes of some. The Fed is expected to bump the rate at least once more before the end of ’22, beyond that is anyone’s call. Same for where mortgage rates land, up in the air.
There are owners living paycheck to paycheck. While owner equity tends to be up, monthly expenses continue as equity on paper doesn’t pay the bills. It is possible some owners will need to sell or perhaps lose their homes. This is not expected to be a large number if it happens but this can happen.
What we do know is that the nonsense of the spring ’22 market is over, we called it in early May as we literally felt the shift over about a two week period. Expect Q4 ’22 and Q1 of ’23 to be quiet with reduced activity, this is common. The 2023 Atlanta housing market will begin to take shape in Q2 ’23, March is usually the start of the spring market. By that point, the Fed should be finished, the interest rates settled and hopefully inflation at least addressed. There are always variables but at this point, we do not expect Atlanta housing inventory to jump in 2023.
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