Atlanta GA Real Estate Market
In the first half of 2021, Metro Atlanta home prices rose. This is a continuation of a year-long rise that has sharply risen prices since the market’s short freeze in the first weeks after the pandemic.
According to the Atlanta Realtors Association, the median home price increased 5.2% between April and $363,000 last month, an increase of 27.4% over May 2020.
There are many factors that have contributed to rising demand. However, sale listings have declined, which has led to buyers bidding against each other for a limited number of homes. Cynthia Lippert is the president of the association. “Scarce of inventory is definitely playing a part.”
Experts say that the average number of listings in a market with buyers and sellers having roughly equal bargaining power is six months. However, inventory has dropped to about 1.1 month.
This is transforming a growing number listings into auctions of high-intensity with multiple bids exceeding the asking price.
According to Torrence Ford of Premier, an Atlanta realty brokerage, wannabe buyers are quick to find attractive listings and will often put down a bid. They also offer to pay fees that would normally be paid by the seller.
Ford stated, “Every listing that I take, I receive between six and 29 offers in the first 72 hours of being on the MLS.” We are seeing the asking price go up for every listing we get. Each and every one.
Some sellers were hesitant to allow strangers into their homes at the beginning of the pandemic and refused to list the property for sale. Many potential sellers realized they could get a fair price but began to wonder if it was possible to find a home.
Scarcity is Driving Up Prices
According to John Hunt , a principal at MarketNsight (a housing research company), the gap has not been filled by new housing construction.
He said that homebuilding has been far below population growth since the 2007-2009 recession. It will take time to restore the market to its former balance. “We have underbuilt the market for 10 years, so it will take us 10 more years to rebuild it. It’s not me. That’s math.
He said that while supply is limited, demand is increasing.
Demand is High
Despite the economic hardship caused by the pandemic’s devastation, the majority of the damage was done to lower-wage earners, who were more likely to be renters than buyers. The largest generational cohort was also responsible for stabilizing their finances, moving up their careers, combining up, having children, and contemplating homeownership.
Hunt stated, “We just switched off this huge beast called the millennials.”
Rajeev Dhawan (director of the Economic Forecasting Center, Georgia State University) said that home economics were further fuelled by “the wealth effect”.
Dhawan said that the stock market rebounded after a brief but severe slump. This made many people, whether they were wealthy investors or holders 401(k),s, feel richer. The stock market is tightly linked to the housing market.
Word of mouth is a great way to avoid a bidding war. Ford at Re/Max Premier learns about a potential seller and searches for a buyer quickly.
A home will be listed by a major service once it is. This will allow thousands of agents to view it and their clients. They won’t bid on a home if they don’t know where it is for sale.
Ford stated that there are many off-market transactions. They have not listed the house. They haven’t placed a sign in my yard. They do know me.”
Zillow reports that one-third (33%) of homes in Metro Atlanta sold in March were purchased for more than the asking prices. One in eight homes sold above the list price last year. Zillow stated that the average home for sale in Atlanta was listed for six days before it was sold.
Last month, 6,631 homes were sold in the 11 tracked counties by the Realtors Association reports. 75% of these sales took place in the core four counties. Gwinnett, Cobb, and DeKalb had the most homes that were sold in Fulton, with 1,760. Fulton also had $410,000 as the median price.
Lippert, of the realtors association, stated that 8.0% less homes were sold in May than April. This is not good news for homeownership long-term.
This was a huge problem for sellers, but it won’t stop buyers with more money who will have more options. However, the shortage of homes at the lower price points is preventing some buyers from entering the market.
She said that there is a growing number of buyers who are likely to be prevented from moving at this point.
Metro Atlanta* Home Sales, May 2021
6.631 homes sold
Median sales price $363,000
Comparable to May, 2020