New Market Realities - February 2021

Market Realities

Market Realities – First 45 Days 20 vs 21

Market Realities – February 2021 Update

Sales Summary 1st 45 Days Units Closed 1st 45 in 20

Price Red

% Price Red

Cherokee 383

155

40.5% 342 (-11.9%) 53

15.5%

Cobb

832

336

40.4% 725 (-14.8%) 171

23.5%

Dekalb

662

240

36.3% 586 (-13%)

145

24.7%

Fulton

1066

440

41.3% 918 (-16.1%) 272

29.6%

Forsyth

322

149

46.3% 298 (-8.1%)

21.1%

432

40.3% 930 (-15.2%) 145

Gwinnett 1071

Units Closed 1st 45 in 21

Price Red % Price Red

63

15.6%

Market Realities

In the Last 45 Days – 6 Core Counties • •

Total of 3,919 SF Det Sales 343 were New Construction – 8.8% of the Market (FMLS only) • 3576 were Resale Properties • Of those 3576 Resale Sales, 1207 of them Closed at a price above Original List Price (33.8%)

1st 45 Days in 21 % Over list

Cherokee Cobb Dekalb Fulton Forsyth Gwinnett

34.4% 38.2% 32.7% 28.3% 36.8% 41%

Market Realities

Key Takeaways: • • •

Significant decrease YoY in the number of homes having to reduce their List price in order to go under contract Total number of homes closed in the 1st 45 days of 2021 compared to 2020 is down approximately 13% in the 6 core counties with the greatest drop occurring in Fulton.

Over a 1/3 of the Resale SF Detached homes in the 6 Core County area sold at a price above Original List price with Gwinnett leading the way at 41%

Market Realities

Median Sales Price Comparison Jan 2021 Median Sale Price

Dec 2020 Median Sale Price

% Change MoM

Jan 2020 Median Sale Price

% Change YoY

Cherokee $330,000

330,000

0%

276,000

19.6%

Cobb

$321,450

325,000

-1.1%

275,000

16.9%

Dekalb

$303,210

$310,000

-2.2%

$239,900

26.4%

Fulton

$348,000

$347,000

.2%

$293,250

18.7%

Forsyth

$390,000

$402,000

-3%

355,740

9.6%

Gwinnett $294,000

$290,000

1.4%

$259,000

13.5%

EXISTING Home Prices

Y-O-Y by region

19.0% 12.9%

U.S.

14.2%

13.7% 11.3%

Northeast

Midwest

South

West NAR

% Change in Sales from last year by Price Range

93.6% 76.3% 64.6%

36.0% 5.7% -15.3%

%

$0-100K -15.3%

$100-250K 5.7%

$250-500K 36.0%

$500-750K 64.6%

$750K-1M 76.3%

$1M+ 93.6% NAR

Case Shiller

9.1%

Year-Over-Year PRICE CHANGES 20 City Composite

8.0% 6.6% 5.3%

2.8%

Dec

3.1%

Jan 2020

3.5%

Feb

3.9%

4.0%

Mar

Apr

4.1%

3.6%

3.5%

May

Jun

Jul

Aug

Sept

Oct

Nov S&P Case Shiller

Peak Index July 2007 – 136.4 Lowest Index point after recession occurred March 2012 – 82.5 Index as of November 2020 – 167.1 Translation – Since the bottom of the downturn homes have appreciated approximately 9.4% on an annual basis in the Atlanta MSA https://fred.stlouisfed.org/series/ATXRNSA

2021 Home Price Forecaster National Association of Realtors Zelman & Associates realtor.com Freddie Mac Mortgage Bankers Association Fannie Mae CoreLogic

Average of all seven

Projection 6% 6% 5.7% 5.3% 5.1% 4.2% 2.9%

5%

New Market Realities

Key Takeaways: • • • •

MoM appreciation across 6 core counties relatively flat suggesting an easing in what has been robust price increases over the last 9 months Significant Median SP YoY across all counties with Dekalb leading the way at 26.4% Result of these Median increases is a combination of price appreciation and selling more homes in the upper price ranges AND overall price increases in new home market According to Case-Shiller, Home Prices in Atlanta MSA have appreciated 12.2% in the last 12 months (Nov-Nov)

Market Trends

Sales Comparison – Cherokee County 1st 45 days in 2020

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

340 (88.8%)

137 (40.3%)

28.2

500K - Mil

39 (9.5%)

16 (41%)

46.9

+ Mil

4 (.7%)

2 (50%)

50.5

79.8 145 113.5

1st 45 days in 2021

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

288 (84.2%)

36 (12.5%)

21.5

500K - Mil

47 (13.7%)

15 (32%)

38.4

+ Mil

7 (2%)

2 (28.6%)

94.8

65.7 86.5 120

Market Trends

Month’s Supply, Total Days on Market and Average Price Reduction Summary Jan 2021 – Cherokee County Jan 2020

Month’s Supply 2021

Month’s Supply – 2020

Total DOM – 2021

Total DOM – 2020

Average Price Red – 1st 45 days

Under 1.1 500K 500K - Mil 3.7

3.6

29

63

$15,170

9

87

128

$18,852

+ Mil

21

175

206

$22,500

5.5

Market Trends

Sales Comparison – Cobb County 1st 45 days in 2020

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

702 (84.4%)

284 (40.5 %)

24.2

500K - Mil

113 (13.6%)

46 (40.7%)

43.3

+ Mil

17 (2%)

7 (41.2%)

71

86.4 122.6 162.8

1st 45 days in 2021

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

586 (80.8%)

117 (20%)

13

500K - Mil

123 (17%)

47 (38.2%)

17.3

+ Mil

16 (2.2%)

7 (43.8%)

90.8

52.9 89.6 147.3

Market Trends

Month’s Supply, Total Days on Market and Average Price Reduction Summary Jan 2021 – Cobb County Jan 2021

Month’s Supply 2021

Month’s Supply – 2020

Total DOM – 2021

Total DOM – 2020

Average Price Red – 1st 45 days

Under .9 500K 500K - Mil 1.8

2.2

25

63

$16,490

6.5

57

106

$25,881

+ Mil

10.9

166

315

$117,583

6.5

Market Trends

Sales Comparison – Dekalb County 1st 45 days in 2020

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

551 (79.2%)

200 (36.3%)

27.8

500K - Mil

92 (17.6%)

34 (37%)

24.6

+ Mil

19 (3.2%)

6 (31.6%)

33.2

78.5 85.5 108.7

1st 45 days in 2021

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

443 (75.6%)

91 (20.5%)

13.1

500K - Mil

127 (21.6%)

47 (37%)

20.2

+ Mil

16 (2.8%)

7 (43.8%)

24.8

57.7 90.8 72.7

Market Trends

Month’s Supply, Total Days on Market and Average Price Reduction Summary Jan 2020 – Dekalb County Jan 2021

Month’s Supply 2021

Month’s Supply – 2020

Total DOM – 2021

Total DOM – 2020

Average Price Red – 1st 45 days

Under 1.1 500K 500K - Mil 2.3

3.1

30

59

$21,895

4.8

59

72

$37,635

+ Mil

6.9

65

92

$62,286

5.9

Market Trends

Sales Comparison – Fulton County 1st 45 days in 2020

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

751 (70.4%)

285 (37.9%)

30.4

500K - Mil

237 (22.3%)

120 (50.6%)

42.8

+ Mil

78 (7.3%)

35 (44.8%)

70.6

89.5 122.8 149.5

1st 45 days in 2021

Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

Under 500K

541 (58%)

126 (29.7%)

14

500K - Mil

278 (32.9%)

102 (32.4%)

24.9

+ Mil

99 (9.1%)

44 (35.1%)

35.1

71.9 79.6 109.6

Market Trends

Month’s Supply, Total Days on Market and Average Price Reduction Summary Jan 2021 – Fulton County Jan 2021

Month’s Supply 2021

Month’s Supply – 2020

Total DOM – 2021

Total DOM – 2020

Average Price Red – 1st 45 days

Under 1.4 500K 500K - Mil 1.6

3

35

65

$17,287

4.9

50

120

$32,429

+ Mil

10.9

90

172

$110,080

5.7

Market Trends

Sales Comparison – Forsyth County 1st 45 days in 2020 Units Closed

Price Reductions

Total DOM – Non Red

Total DOM Reductions

92.3 140.8 75

Under 500K

254 (78.8%) 112 (44.1%)

34.6

500K - Mil

67 (20.8%)

37 (55.2%)

65.6

+ Mil

1 (.4%)

1 (100%)

n/a

Price Reductions

Total DOM – Non Red

Total DOM Reductions

71 125.7 111.8

1st 45 days in 2021 Units Closed

Under 500K

213 (71.4%) 37 (17.4%)

17.8

500K - Mil

76 (25.5%)

22 (28.9%)

25.6

+ Mil

9 (3.1%)

4 (44.4%)

95.8

Market Trends

Month’s Supply, Total Days on Market and Average Price Reduction Summary Jan 2021 – Forsyth County Jan 2021

Month’s Supply 2021

Month’s Supply – 2020

Total DOM – 2021

Total DOM – 2020

Average Price Red – 1st 45 days

Under .7 500K 500K - Mil 1.2

3.1

29

87

$13,501

6.7

54

110

$34,887

+ Mil

44

128

75

$53,775

5

Market Trends

Sales Comparison – Gwinnett County 1st 45 days in 2020

Units Closed

Price Reductions

Total DOM – Non Red

Under 500K

1016 (94.8%) 411 (40.4%) 38.2

500K - Mil

48 (4.5%)

16 (33.3%)

51

+ Mil

4 (.7%)

2 (50%)

94

1st 45 days in 2021

Units Closed

Price Reductions

Total DOM – Non Red

Under 500K

849 (91.3%)

113 (13.3%) 14.1

500K - Mil

66 (7.1%)

24 (36.4%)

37

+ Mil

15 (1.6%)

8 (53.3%)

192* (17)

Total DOM Reductions

89.1 161.2 141.1 Total DOM Reductions

52.4 88 298.6

Market Trends

Month’s Supply, Total Days on Market and Average Price Reduction Summary Jan 2021 – Gwinnett County Jan 2021

Month’s Supply 2021

Month’s Supply – 2020

Total DOM – 2021

Total DOM – 2020

Average Price Red – 1st 45 days

Under .6 500K 500K - Mil 2

2.6

21

67

$12,918

9.2

64

97

$33,758

+ Mil

42.5

136

106

$186,200

5.7

Market Realities

Key Takeaways: • It’s a Seller’s Market across all price points • Significant declines in the total number of sales for homes priced under 500K. Primary driver – Lack of inventory • Significant YoY increases in total number of sales between 500K-Mil. Months’ supply significantly decreased in this price point across all 6 counties as a result • If you currently have a listing under 500K and it’s been on the market more than 2 weeks, it’s overpriced, period.

• If you currently have a listing between 500K-Million and it’s been on the market more than 3 weeks, it’s probably overpriced.

Market Realities – February Update

Current Inventory & Pending Sales Analysis

Market Trends

Current Inventory Analysis by County - February February

Current Inventory – 2021 (% Difference from PY)

Inventory a year ago

Number of price reductions (% Overpriced)

% of Homes New Construction

Cherokee 333 (-64.5%)

937

58 (31%)

156 (46.8%) 49.3%

Cobb

539 (-64.3%)

1522

109 (20.2%) 131 (24.3%) 39.7%

Dekalb

556 (-58.4%)

1335

154 (27.7%) 100 (18%)

Fulton

1199 (-57%)

2819

333 (27.7%) 232 (19.3%) 17.2%

Forsyth

189 (-76.1%)

790

35 (18.5%)

70 (37%)

42.9%

1933

88 (19.7%)

84 (18.9%)

41.6%

Gwinnett 445 (-76.5%)

% of New Construction with Price Increase

34%

New Market Realities

All Price Points – 6 Core County Area

New Market Realities

Less than 500K – 6 Core County Area

New Market Realities

500K Million – 6 Core County Area

New Market Realities

Above 1 Million – 6 Core County Area

Pending Home Sales Year-Over-Year By Region 26.6% 21.4%

22.1% 18.9% 13.9%

U.S

Northeast

Midwest

South

West

NAR

Market Realities

Key Takeaways:

Market Realities

Key Takeaways: • • • •

SF Detached Inventory is down 65% through the 1st 2 weeks in February across all price points in the 6 core county area compared to same time period in 2020.

Biggest shortage of inventory is for homes priced under $500K with a year over year decline of 71% In January 2021, Buyers pended more inventory than actually came to market at a clip of 110% For homes priced under $500K, Buyers pended almost 150% of the market. At that pace if no new listings come on the market, there will be no inventory in less than 2 months.

New Market Realities

Condo Analysis Areas 21, 23 & 24

Area 21

Area 23,24

Market Realities

Other Trends/Info

Months Supply of Available Inventory Existing Homes

4.5 4.0 3.5

3.6

3.0 2.5 2.0

1.9 1.5 1.0

Sept

Oct

Nov

Dec

January 2020

Feb

Mar

Apr

May

June

Jul

Aug

Sept

Oct

Dec NAR

Year-over-Year Inventory Levels January 2014

January 2015

January 2016

January 2017

January 2018

January 2019

January 2020

% 7. 5. 3. 6. 6. 5. 5. 4. 6. 5. 5. -0 -0 -0 2. -0 1. 0. -4 -1 -3 -4 -1 -3 -2 -1 -1 -3 -9 -5 -5 -1 -6 -1 -9 -6 -7 -6 -6 -9 -8 -7 -9 -6 -6 -1 -9 -1 -9 -8 -7 -6 -6 0. 0. 2. 1. 2. 4. 6. 4. 2. 2. 1. 2. 0. -1 -2 -2 -4 -5 -9 -1 -9 -1 -1 -1 -1 -2 -1 -1 -1 -2 -2

NAR

HOUSING SUPPLY

Year-Over-Year

Jan 2020

-11.3%

Feb

Mar

-9.8%

-10.20%

Last 12 Months

Apr

-19.70%

May

-18.8%

June

Jul

-18.2%

Aug

-18.6% -21.1%

Sept

-19.2%

Oct

Nov

Dec

-19.8% -22.0%

-23.0%

NAR

“Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.

NAR

WHERE WILL LISTINGS COME FROM IN 2021?

TOP THREE REASONS homeowners didn’t put their house on the market in 2020

34%

financial uncertainty

YouGov Survey

life is too uncertain right now

31%

25%

COVID-19 health concerns

“Some people will feel comfortable listing their home during the first half of 2021.

Others will want to wait until the vaccines are widely distributed. This suggests more inventory will be for sale in late 2021 and into the spring selling season in 2022.”

Ali Wolf

Chief Economist at Zonda

Consensus View of Work-from-Home 21%

Percent of workers working from home

18% 12% 6%

2019 Actual

2020 Actual (Latest)

2021 F

2022 F

2020 Panel Consensus Forecast 2020 NAR’s Real Estate Forecast Summit

“New home sales activity, both mortgage applications and home sales, ran at a pace considerably ahead of 2019, showing the ongoing strong growth in housing demand and new residential construction.”

Joel Kan

MBA’s AVP of Economic and Industry Forecasting

New Home Inventory

months supply Last 12 Months

6.8 6.5

5.5

5.3

5.0 4.3

4.2 3.6

20-Jan

Feb

Mar

Apr

May

Jun

Jul

3.5 Aug

3.6

3.6

Sept

Oct

Nov

4.3

Dec Census

Foot Traffic Last 12 Months Indicator of future sales

60.9

47.3

46.5 41.8

44.2 40.7

39.8

32.9 29.4

13.5 6.8 1.8 Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec NAR

New Market Realities

Mortgage Update

Mortgage Rate Projections Quarter

Freddie Mac

Fannie Mae

MBA

NAR

Average of All Four

2021 2Q

2.9

2.7

3.1

3.0

2.92%

2021 3Q

3.0

2.8

3.3

3.0

3.02%

2021 4Q

3.0

2.8

3.4

3.1

3.07%

2022 1Q

3.1

2.9

3.5

3.2

3.17%

Mortgage Rates

2018

- Actual - Projected

Freddie Mac 30-Year Fixed Rate

2019 2017

2020

2016

2022 2021

2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Rate 3.7 3.6 3.5 3.8 4.2

4

3.9 3.9 4.3 4.5 4.6 4.8 4.4

4

3.7 3.7 3.5 3.2

3

2.8 2.9 2.9

3

3

3.1 3.1 3.2 3.2

Freddie Mac

Mortgage Rates

Freddie Mac 30-Year Fixed Rate

Where Are They Going?

1/4 2/1 3/1 4/5 5/3 6/7 7/5 8/2 9/6 10/4 11/1 12/6 1/3 1/31 3/7 4/4 5/2 6/6 7/3 8/1 9/5 10/3 11/7 12/5 1/2 2/6 3/5 4/2 5/7 6/4 7/2 8/6 9/3 10/1 11/5 12/3 1/7 2/4

January 2018 – Today Actual Interest Rates

2.9

2021 Q2

3.0

3.0

2021 Q3

2021 Q4

3.1

2022 Q1

Freddie Mac

New Market Realities

So what should you be doing now?

• Send the 2021 Residential Real Estate Forecast to your SOI • Take advantage of the Weekly RE Buzz slides • Use the Monthly Social Stats for your market areas • Send out the Quarterly Market Updates • Instalist

New Market Realities

What is HNR going to do?

• Continued Magazine and Press Advertising • New TV Campaign beginning March 1st • New Digital ad campaigns beginning March 1st • Broker support and Weekly Sales Meeting focus on activities designed to help you grow your business

New Market Realities

“Your persistent actions are the bridge between mind and matter, between the inner and the outer. Do what you’ve been called to do. Do it with grit, do it with courage, do it with boldness and faith, and do it every day for the rest of your life.”