VIEWPOINT

During 2022 there was a long-awaited and dramatic shift in the housing market. In July 2023, the Federal Reserve raised interest rates for the 11th time in 17 months, to combat inflation. Mortgage rates have gone from around 3.25% in January 2022 to over 7%, drastically increasing the monthly cost of financing a home purchase and therefore reducing a Buyer’s “purchasing power.”

Most notably this market shift has caused a substantial decline in the number of closed transactions. The total number of single-family detached home sales year to date (“YTD”) through June 30th declined by 32% in 2023 as compared to 2022. This is consistent with the decline in number of transactions we saw in the last half of last year.

While the number of closed transactions for single-family homes declined significantly, the average sales price YTD in metro- Atlanta through June 30, 2023, was $482,944 vs. $453,855 for June 30, 2022. This represents an increase in Average Sales Price of 6%. This indicates it is still a lucrative time to sell. We are still seeing multiple offers when houses are in good locations and priced appropriately, just not with the frequency and intensity of previous years. We are also seeing more price reductions and longer Days on the Market than in recent years.

Active inventory of single-family homes in metro Atlanta decreased marginally from 10,529 active listings as of the end of June 2023 compared to 10,788 at the end of June 2022. We are still much lower than historical inventory levels (e.g. December 2014 the listings were 19,310), as long as inventory remains low, prices are likely to continue to hold.

Of the 81 neighborhoods we reviewed, the vast majority of neighborhoods were still deemed to be a “seller’s market”. We used the measuring stick that six months of available inventory represent a balanced market: meaning less than six months of inventory represents a seller’s market (a market more favorable to sellers in negotiations), and over six months of inventory represents a buyer’s market. Only 7 neighborhoods were either “balanced market” or “Buyer’s Market.”

The Average Sales Price to Original List Price ratio, a measure of how close to the original asking price a seller is getting, remained high in the majority of neighborhoods but declined in most of those neighborhoods from the previous period. This means that Sellers are having to negotiate a little more than they were in recent years but rarely did they dip below 97% SP/OLP.

Generally, the Average Days on the Market, the length of time from listing the property until binding contract, increased in most neighborhoods we reviewed year to date between 2022 and 2023.

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 neighborhoods 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 neighborhood is our business.

Randal Lautzenheiser, Managing Broker and Owner

Len Kwilos, Agent and Owner

David Vannort, Agent and Owner