CONDO VIEW

During 2022 there was a long awaited and dramatic shift in the housing market. The Federal Reserve raised interest rate 7 times during the year, in an effort to combat inflation. Mortgage rates went from around 3.25% in January to a high of over 7% in November, drastically increasing the monthly cost of financing a home purchase and therefore reducing a Buyer’s “purchasing power.” This shift in the market took us from an “Extreme Seller’s Market (with very low inventory, frequent multiple offers with over asking prices and waived contingencies) in the first half of the year to a return to a more “normal” market by the end of the year.

Most notably the market shift caused a substantial decline in the number of closed transactions. While the total number of attached home (“condo”) sales year to date (“YTD”) declined by 21% in 2022 as compared to 2021, the decline was much more prevalent in the second half of the year. As of June 30, 2022 the year to date decline was only 13%. On a month by month basis, July through September were down 20-25%, down 38% in October, and down 42-43% in November and December, over the previous months in 2021. We will have to see if this trend continues.

While the number of closed transactions for attached homes declined significantly, the average sales price YTD in metro- Atlanta through December 2022 was $369,204 vs. $324,809 for year end 2021. This represents an increase in Average Sales Price of 14%. While prices were up, year over year, the median home sale price in metro-Atlanta declined about 10% between June 2022 and December 2022. We are also seeing more price reductions than in recent years and an increase in the inventory of available homes. If this trend continues it will likely lead to a flattening or reduction in sales prices. This would be long needed bright spot for Buyers who can possibly lock in a price on a home while prices have stabilized and there are fewer Buyers in the market, with the intention of refinancing when mortgage rates become more favorable.

Active inventory of of attached homes in metro-Atlanta increased from 1,380 at year end 2021 to 2,145 at December 31, 2022, representing a 55% increase in available homes. We are still lower than historical inventory levels (e.g. December 2014 the listings were 2,751), but if this increase in inventory continues, eventually we will see reduction in sales prices and longer time on market.

In Midtown condominiums, we saw a 22% decline in the number of closed sales from 2021 to 2022. During that same time frame, we saw the average sales price in Midtown increase from $393,500 to $451,500 (a 15% increase) and average sold price per square foot increased from $341 to $376 per square foot (a 10.3% increase.) In Midtown, there was also a substantial decrease in the total days on market from an average of 58 days in 2021 to 32 days in 2022. The sales price to original list price ratio, a measure of how close sellers are getting to their asking price, increased from 97.28% in 2021 to 99.04% in 2022. This means in 2022 condos were selling much faster and sellers were negotiating less.

While it is hard to predict future real estate trends, we want our clients to understand what is happening in the market, so they will understand pricing and how quickly a home will likely sell in the community where they live or hope to live. We hope this report will help with that. If you would like a more in-depth analysis of a specific area or want to determine the value of your home, our neighborhood real estate experts are here to help.

We know the Atlanta market. Your building is our business.

Randal Lautzenheiser, Managing Broker and Owner

Len Kwilos, Agent and Owner

David Vannort, Agent and Owner

Colony

Colony

Colony

Cornerstone

Cornerstone