A Word From Us

The past three years in the real estate industry have brought us a series of ups and downs. We finally believe we have reached a sense of normalcy again and are back to a more balanced market across Georgia.

The first half of 2022 saw an extension of the hot market of 2021, with a cooling off that settled in for the second half of the year. This was fueled by rising interest rates, inflation, the lack of affordability and market uncertainty. Without question, 2020 and 2021 were outlier years in real estate where we saw less travel, very low interest rates, and an increased focus on home life. Because these years were such outliers, real estate trends in 2019 are also referenced throughout this report as a a comparison to a more typical year.

The recent decline in sales began in June of 2022 when rates moved over 5.25%. These rising interest rates increased the cost of home ownership for buyers, pricing many would-be buyers out of the market and forcing others to consider homes at a lower price point than they may have been exploring earlier in the year.

Market inventory is rising but still low with 2.1 months of inventory in Metro Atlanta overall at year end. Demand is down, but so is supply, which is helping to limit significant price declines. While prices are down slightly compared to the summer peak, this reflects an accelerated version of normal seasonal price fluctuations. Notably, the average sales price in Metro Atlanta in the second half of 2022 was still up 9.9% year over year. New listings have been down every month since June, which is, again, an accelerated version of a normal seasonal trend. Inventory reached its lowest level in a decade in December of 2022.

Although national forecasts call for home prices to stabilize or decline in some markets next year, Atlanta is rated the #1 top real estate market for 2023 by the National Association of REALTORS, with home prices expected to increase at least 5% in 2023.

Consumers demand is shifting and home quality matters again. Houses that are well designed, located in desirable areas, and priced well continue to sell. Those with less desirable characteristics are staying on the market longer and in some cases selling below asking price.

There is still latent demand as many people have been in “wait mode,” hoping that interest rates fall and more inventory comes to market. Market uncertainty is still compelling buyers to wait to buy until things look more favorable, which they perceive to be right around the corner. Buyers and sellers are just beginning to realize we are not going to snap back to the same market as a year ago, are adjusting to new interest rates, and are finally making buying and selling decisions again.

Christa Huffstickler Founder & CEO Engel & Volkers Atlanta