The last few years have been full of trauma and change. Economically, we’re facing real challenges across the country and around the world. That’s been particularly apparent in the housing market.
But it’s not as bleak as all that. Local real estate professionals point out that the market is now getting back on a healthy footing. They’re also quick to add that Intown, Buckhead and areas like Brookhaven, Dunwoody, and Sandy Springs are particularly strong.
Despite economists predicting a recession in 2023, Georgia is poised to weather the headwinds thanks to a strong labor market and major developments bringing investment to the state, which means more jobs.
Just last week, the National Association of Realtors declared metro Atlanta the “top real estate market to watch in 2023 and beyond” in a new report.
Still a strong market
“We are currently experiencing month-over-month average sales prices decreasing. However, year-over-year sales prices are still 5% above 2021 values,” said Chase Mizell, Global Real Estate Advisor | Atlanta Fine Home Sotheby’s International Realty. “Our inventory is less than three months, and our average days on market are fewer than 20.”
Figures from the Georgia Multiple Listing Service, which tracks home sales in metro Atlanta, show the median sales price in the region in November was $370,000, an increase of 4.2% from November 2021, but down 2.6% compared to October.
Mizell noted that Atlanta has a leg-up on the national market as it continues to be a top-five city nationally for corporate relocation. “Generally speaking, we’re expecting the normalization of the real estate market to continue,” Mizell said. “Interest rates are more than double where they were at the beginning of 2022; however, inventory levels remain very low.”
Mizell said Atlanta needs new developments that are attainable by first-time homebuyers. “The rate of appreciation has forced most of our first-time homebuyers to the suburbs, so any developments with more approachable pricing, such as Summerhill, will lead the pack in demand,” he said.
Molly Carter Gaines, Ansley Real Estate | Christie’s International Real Estate, said she expects to see continued growth, but at a slower rate than previous years, “which is how a normal market functions. I strongly disagree with the negative prognostications, mainly because we still have an influx of buyers moving to Atlanta coupled with very limited inventory, and this won’t change any time soon.”
She added that Druid Hills, Morningside and Virginia Highland continue to be highly sought-after neighborhoods, and the demand for areas like Candler Park and Lake Claire has skyrocketed. “We’re also witnessing the push and pull between historic landmark districts and new commercial construction Intown, which will be a hot topic in 2023,” Carter Gaines said.
“We will continue to see low inventory and interest rates at 6%,” predicted Robin Blass, The Robin Blass Group, Harry Norman REALTORS, adding that the current interest rates are not out of line with historical rates.
She said that first-time buyers are at the lowest level in years, down by 6% according to the National Association of REALTORS. “We do feel that they will be back in the market as home prices stabilize, sellers become more motivated, and buyers find ways to work with the interest rates.”
Blass said that Dunwoody, Sandy Springs, and Brookhaven are expected to remain strong, with their accessibility to highways and the new job growth coming to the Perimeter area.
Good things ahead
Ken Covers, a Private Office Advisor with Engel & Völkers Atlanta with over 20 years of experience, also sees good things in the coming year. “The shifting interest rate certainly has a big effect on the market, but at the same time, we have a really robust city with people moving in and out,” he said. “I expect the Intown market to stay strong.”
From a big-picture perspective, buyers are still trying to understand what life is really like after the pandemic, Covers said. “People can live in almost any part of the country and still have stimulating, interesting careers. I see them weighing their options and making their choices very carefully.”
Since Atlanta still has low inventory in sought-after Atlanta neighborhoods, multiple offers are not necessarily a thing of the past, according to Kim Boyd, Broker Associate, Atlanta Fine Homes Sotheby’s International Realty. “Demand has slowed some, but so has supply. We are only seeing a very slight downward trend on prices with this market shift, particularly with high-end homes.”
She concluded that sellers can still expect a successful profit, but they can expect to give on inspection items when needed repairs or defects come up.
Atlanta continues to top the lists as one of the best places to do business and live, Boyd said, adding that many buyers love being close to the city. “The areas, year after year, that are hot will continue to be Buckhead, Brookhaven, Sandy Springs, Morningside, Virginia Highlands, and Ansley Park.”
The first quarter of 2023 is likely to continue as the fourth quarter of 2022, according to Bill Murray, Senior VP/Managing Broker for Berkshire Hathaway HomeServices Georgia Properties. “If the Feds slow the increases to a half basis point and then, in second quarter, no hikes, this will bring mortgage rates down to the mid to upper 5% and we should be in a much-improved market,” he said.
Murray believes that townhomes will continue to be a strong segment of the market. He shared that his focus is on Doraville, the Westside Quarry area and neighborhoods along the yet-to-be-developed sections of the BeltLine.
“Home ownership is still an excellent way to build wealth,” Murray stated. “Higher mortgage rates are just a cost of building your real estate wealth.”
Mizell also had some encouraging words to share. “We are experiencing a normalization of the market which will be healthier for both buyers and sellers in the long term.”
Older adults active in the housing market
Murray said that he’s seen an increase in seniors in the housing market, especially those who want to downsize and find lower-maintenance properties. He noted that it can be a challenging time for some older adults, who have seen their retirement accounts drop, requiring them to look at different price ranges.
Carter Gaines has a different experience. “I’m intrigued to see that instead of downsizing, I have several older adult clients upsizing and pursuing opportunities with larger lots and more square footage, she said. “These clients like the idea of having a hub for their children and grandchildren to gather for holidays and family get-togethers.”
She added that, in her experience, it’s been an ideal time for active seniors to buy. “My senior clients rely less on financing, which gives them a more competitive foothold in multiple offer situations,” Carter Gaines said.
Blass reported that many older clients feel their large homes and yards are too much to take care of – or they’d rather spend their time and money with travel and other things.
“You’d think that they are looking for smaller, but it’s really something different that they’re looking for,” she said. “They need everything on one floor, but still want lots of square footage with some availability on another level for the family to visit. They’re also looking for developments with smaller lots that are maintained by someone else and that have a sense of community.”