2021 Metro Atlanta Residential Real Estate Forecast

2021 METRO ATLANTA RESIDENTIAL REAL ESTATE FORECAST

ATLANTA LIFE POPULATION BOOM

Atlanta ranks #3 fastest-growing city in the U.S. according to WalletHub.

Things that impact our life and our real estate ENTERTAINMENT PRODUCTION HUB

Georgia ranks #1 for film production.

The U.S. Census Bureau estimates that the population of Georgia could grow by over 100,000 in 2021.

Despite production shutdowns due to Covid-19, there was $2.2 billion spent on feature films and television shows shot in Georgia during the 2020 fiscal year.

LEADING REMOTE WORK

TECHNOLOGY LEADERS

Pre-pandemic, Atlanta already had the highest share of workers nationally working from home.

Atlanta is ranked #3 for work from home conditions based on factors such as infrastructure, industries, and commute considerations.

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Atlanta is the #1 Metro Area Tech Hub in the nation among growth leaders. The Atlanta Tech market has been identified as one of the most resilient and poised for growth.

The above information is believed to be accurate but is not warranted.

MORE PEOPLE WANT TO RELOCATE HERE

ATLANTA MEANS BUSINESS

Atlanta is the #2 moving destination in the U.S. The largest inflow of domestic movers is coming from New York City.

Home to 16 fortune 500 companies, Atlanta ranks among the top 15 metro areas in the Fortune 500 with a cumulative revenue of almost $400 billion in 2020.

Georgia has been named the “Top State for Doing Business” for seven consecutive years.

ATLANTA VALUES DIVERSITY

Georgia is the #1 state for Black Entrepreneurs and the #1 for Black-Owned Business Success.

Atlanta is also the leading tech hub for diversity.

HARTSFIELD-JACKSON AIRPORT REMAINS THE GATEWAY TO THE WORLD

Hartsfield-Jackson is still the #1 busiest airport for the 22nd consecutive year with over 107 million passengers in 2019 and averaging 10 million passengers per month prior to the start of the pandemic according to CEO John Seldon.

MOVING TO THE EXURBS

SECOND HOME MARKET BOOM

2020 saw a rise in people choosing to move to the “exurbs”.

Exurbs are lower housing density areas beyond suburbs with more rural surroundings, but still economically connected to larger nearby metro areas. Forsyth County is among the top “exurbs” in the United States, growing 39% in population in the last decade.

From July-September, vacation home sales were up 44% year-over-year, totaling almost 110,000. Second homes also sold faster, 58% of which sold within a month of being on the market compared to 25% in the same period of 2019.

2021 METRO ATLANTA RESIDENTIAL REAL ESTATE FORECAST | 3

HOUSING MARKET INDICATORS

Going into 2020 we expected that the housing market in Atlanta would continue to climb. The year that eventuated was greatly different to what anyone expected, but with a resilient property market, favorable mortgage rates, and a solid local economy the Atlanta housing market had a very strong year. Looking across the full year of 2020 the average sold price increased 8% to $373,000. In an environment where much was uncertain, after an early pause in March/April the housing market bounced back rapidly and went on to make up lost ground, and then continued the upward momentum. Inventory was tight throughout much of 2020, and in the second half of the year, buoyed by pent up demand and changing lifestyles, demand continued to outweigh supply. At the end of 2020 inventory across the market averaged to only 1.3 months’ supply, this was 50% lower than Dec 2019. The inventory shortage coupled with higher than average demand put upward pressure on price, and at the end of 2020 the average sold price was 11% higher than 12 months earlier, at $393,000.

FORECAST PRICE GROWTH SOURCE 2021 2022 HOME PRICES Corelogic 2.1% 1.5% Mortgage Bankers Association

5.1%

4.2%

Zelman & Associates 6% 3% Fannie Mae 5.4% 3% NAR 8% 5.5% Freddie Mac 5.4% 3% Realtor.com 5.7 % N/A

All major sources are anticipating national home prices will continue to grow in 2021. If the market resumes some normalcy post pandemic it is expected that the rate of growth will slow in the second half of the year.

Nationally prices are predicted to grow anywhere from 5-8%. Even after the strong growth of 2020 it is anticipated that Atlanta will continue its price growth rise in the 4-7% range. The trend of greatest price growth coming from the suburbs is expected to continue.

MORTGAGE INTEREST RATES Mortgage rates are one of the primary drivers of housing market performance. Much of the resilience of the market in 2020 resulted from interest rates reaching lows that had not been seen since the 1970s. A number of financial institutions cited new record lows multiple times in 2020, as rates dipped as low as 2.66% in December for 30-year fixed rates.

Indications from leading institutions suggest that while there will be increases, interest rates are expected to remain relatively low throughout most of 2021 averaging 2.8% and possibly reaching 3.4%.

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SOURCE 2021 2022 Fannie Mae 2.7% 2.9% Freddie Mac 2.9% 3.2% Mortgage Bankers Association

3.4%

3.9%

The above information is believed to be accurate but is not warranted.

HOME INVENTORY Historically a five to six-month supply of homes is considered a balanced market. In 2020 a seller’s market took hold as a number of markets across Atlanta experienced inventory levels of less than one-month supply. The traditional market lull at the end of the year came much later and with less decline in 2020. 2021 starts with many would-be buyers of 2020 still looking for their next home after being priced out of the competitive 2020 market.

As the uncertainties of the pandemic subside and consumer confidence improves, more homes will hit the market, and by the second half of 2021 we should see a more balanced market.

OWNING VS. RENTING In recent years, homeownership has been considered favorable compared to renting as rent costs have spiked across Atlanta. And while this generally continues to be the case, with the increases in home prices over the last 12 months, for some areas the reverse is now true. When looking at an average 3-bedroom house it is now considered to be more affordable to rent than to buy in both Cobb and Fulton counties.

Homeownership is still anticipated to be the preference of most, with the homeownership rate in the six core counties of metro Atlanta standing at 59% as of the fourth quarter of 2020.

GEORGIA’S ECONOMY Despite the lasting effects of the pandemic, Georgia showed economic improvements during the first half of fiscal 2021. From July to October, Georgia increased economic development investments by 56% and jobs by 45% compared to the same period in 2019. The state receives the majority of its revenue from sales tax and individual income taxes, which have not only increased since the beginning of the fiscal year, but have also improved on last year. In November 2020 individual tax collections were 14.3% greater than November 2019, and sales taxes were 6% higher than a year ago.

Georgia’s GDP rate is on track to recover faster than the national average with an anticipated 4% growth rate. Job growth in the metro Atlanta area will grow by an expected 1.9%, almost twice the rate of the country at 0.9% while unemployment is expected to decrease from 6% to 5.1% in 2021. Atlanta is among the top 10 fastest growing cities and is one of the “Super Sun Belt” markets that will generate the most job growth from 2019 to 2025.

NEW CONSTRUCTION Demand for new homes increased in 2020, with new construction of single-family homes in December 2020 up 28% on 2019. Cobb and Gwinnett counties made up a combined 42% of single-family home permits since the start of 2019. There were 175 developments of single-family homes that were built out since the beginning of 2020 totaling over 11,000 units in metro Atlanta area. Despite this being a decrease in units from 2019, there are now almost 50,000 total units listed as “future” or proposed in the six core counties of metro Atlanta according to MetroStudy. New construction in Atlanta is expected to increase by 9% in 2021, in line with the national expectation.

HOUSING AFFORDABILITY In 2020 national home affordability declined with the monthly average cost of home ownership payments exceeding 30% of income. Compared to other cities and the national average, Atlanta remains relatively affordable with the monthly average cost of ownership sitting at 23.8% of income. By contrast, New York City home ownerships costs represent almost 40% of income. According to the Federal Reserve Bank of Atlanta, the city stands at an affordability index of 126, indicating it is in the upper quadrant of the more affordable cities in the country with a large population.

2021 METRO ATLANTA RESIDENTIAL REAL ESTATE FORECAST | 5

LOW INTEREST RATES

THE FORECAST FOR ATLANTA IN 2021

STRONG MIGRATION

Following a unique and often unpredictable 2020, Atlanta has entered what looks to be a very strong housing market in 2021. The challenge of limited inventory, which impacted much of 2020, will continue for at least the first half of 2021, and in some areas this challenge may extend until the end of 2021. We will see a continuation of recovery with interest rates staying below or close to 3% for 30-year fixed rates for much of the year.

The compromise of location for home features will be one to watch in 2021 as more companies confirm plans to shift to permanent or semi-permanent work from home arrangements. Throughout the last twelve months as people have spent an increasing amount of time in their home, many re-evaluated the premium price of location over home function and comfort. Inner city and urban areas continue to hold value and appeal, but home inventory becomes increasingly scarce as you move to suburban areas.

Buyers are moving up price brackets to secure their dream home. As demand continues to outpace supply more buyers will stretch their budgets. Affluent buyers in higher income brackets that have been less impacted by economic hardships in 2020 find themselves with greater disposable income going into 2021. Income usually spent on

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MODERATE INVENTORY INCREASE

REBUILT ECONOMY

vacations, entertainment and shopping is now being diverted into creating pleasure in the place where it can be enjoyed – the home!

Demand will continue for luxury inclusions such as pools, home gyms and saunas, outdoor kitchens, and bigger landscaped gardens.

The rise in multigenerational homes will continue. What started in 2020 as a safety reaction is expected to be a lasting trend as families re-evaluate housing choices for older parents and family members. There has been an increase of caring for the eldering in your home. This is driving demand for larger homes with increased bed and bath counts, and of course easy accessibility. Add to this a larger proportion of younger people losing jobs and moving home as a result of the pandemic and now there is a multigenerational squeeze from both ends of the spectrum.

The Atlanta Housing Market has all the ingredients for success in 2021: Stable Price Growth + Buyer Demand + Low Interest Rates + Economic Growth + Population Growth The only obstacle to a thriving market in 2021 is short supply of homes. If consumer confidence continues to improve, Atlanta could break the record performance of the past two years.

The above information is believed to be accurate but is not warranted.

YOU HAVE QUESTIONS…WE ARE HERE TO ANSWER. Every situation is different, and an expert consultation is the best way to understand all the considerations that may impact you.

Harry Norman, REALTORS®, backed by over 90 years of Atlanta experience is the perfect place to start.

With 15 offices across Atlanta and greater Georgia, along with affiliate partnerships extending our reach nationally and internationally, you can be confident that we truly understand the market.

If you are looking for a premium service experience, backed by market leading expertise, contact us today.

Let us show you the Harry Norman, REALTORS® difference.

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391 ARGONNE DRIVE $7,385,000

3995 RANDALL MILL ROAD $3,200,000

3218 NANCY CREEK ROAD $2,985,000

10 W ANDREWS DRIVE $5,400,000

5315 RIVERVIEW ROAD $3,175,000

3885 PARIAN RIDGE ROAD $2,680,000

16168 HOPEWELL ROAD $3,750,000

1050 STOVALL BOULEVARD $2,950,000

923 SPRINGDALE ROAD $2,450,000

OUR TOP 2020 SALES

2021 METRO ATLANTA RESIDENTIAL REAL ESTATE FORECAST | 7

A LUXURY EXPERIENCE BUILT ON PREMIUM SERVICE AND RICH RELATIONSHIPS

AEROTROPOLIS 404-948-4400 ATLANTA NORTH 770-622-3081 ATLANTA PERIMETER 770-394-2131 BIG CANOE® 770-893-2400 BLAIRSVILLE 706-745-3000 BLUE RIDGE 706-913-8300 BUCKHEAD 404-233-4142 BUCKHEAD NORTHWEST 404-261-2700 EAST COBB 770-977-9500 ELLIJAY 706-913-8300 THE COLLECTION AT FORSYTH 770-497-2000 HISTORIC MARIETTA 770-422-6005 INTOWN 404-897-5558 LUXURY LAKE & MOUNTAIN 706-212-0228 NORTH FULTON 678-461-8700 PEACHTREE CITY 770-632-8526 SAVANNAH 912-233-6609 WOODSTOCK 404-495-8331 LONDON +44 20 7467 5330

Source: 1. NAR (National Association of Realtors), 2. Metrostudy, 3. Atlanta Agent Magazine, 4. NationalMortgageNews.com, 5. ABC News, 6. Realtor.com, 7. ATTOM Data, 8. HousingWire.com, 9. Georgia Rankings 2020 (Metro Atlanta Chamber of Commerce), 10. US Census Bureau, 11. Atlanta Journal Constitution, 12. Atlanta Business Chronicle, 13. Georgia Economic Growth 2021 (University of Georgia), 14. 2021 Emerging Trends in Real Estate Report, 15. 2021 Real Estate Trends Swanepoel Trends Report, 16th Edition, 16. HUD PD&R Housing Market Profile, 17. Focus Atlanta 2020 Webcast (YouTube), 18. RealWealthNetwork.com, 19. Fannie Mae, 20. Freddie Mac, 21. FMLS.com, 22. Trendgraphix, 23. Fastest Growing Exurbs in the US (CapRelo), 24. Home Ownership Affordability Monitor (Federal Reserve Bank of Atlanta), 25. Georgia.org, 26. Washington Post, 27. Core Logic, 28. Zillow, 29. RIS Media