2023… Chaos to calm?

Brought to you by

– Lara Dolan, Realtor and Partner, The Craft Dolan Team at Ansley Real Estate

As we slide into a New Year, it’s valuable to take time and reflect. For 2023, we’ve spent more time than normal contemplating our experiences over the past 3 years and concluding that the first few months of each 2020, 2021 and 2022, were pretty unique times in our collective experience.

- The first quarter of 2020 had us wondering where this “corona virus” would lead. Terrifying numbers of actual and anticipated deaths, overworked hospital staffs, global shutdowns, and intense economic fear were a reality for many. In our industry, Realtors, builders, and lenders worried that the business of real estate would halt dramatically which it did, for about 8 weeks.

- January of 2021 ushered in some positivity. Vaccines were being widely distributed; however, people had left the workforce in droves and most schools were not yet in person. Real estate prices were on a dramatic upward swing as people considered that business might never return to “normal”. The trend that began in summer 2020, of people purchasing homes farther away from cities and traditional employment hubs gathered steam. Combined with record low interest rates, the real estate market saw continued unprecedented growth in a heavily slanted seller’s market.

- Q1 2022, and Omicron was on everybody’s lips. While the impact of this variant was less severe, it was clear Covid may be here to stay. With continued low interest rates, competition remained stiff for buyers while sellers enjoyed continued profit taking for the first half of the year until the Fed’s activities resulted in an abrupt increase in mortgage interest rates and the corresponding nose-dive in real estate activity overall.

“Chaos” seems an adequate term for the past three years. So where are we now? The early weeks of 2023 find most communities carrying on as normal; schools are back in session and many people are back to work in-person at least some of the time. Residential real estate is slowly emerging from the halt brought on by last summer’s swift interest rate hike. https://www.ansleyre.com/site/thecraft-dolan-team/pages/6283/tastingsteachings

A “return to normalcy” has become a common phrase, but what does it mean?

In real estate we believe it means a more equitable position between buyers and sellers without either party having a dramatic advantage. Stabilizing interest rates and inventory are helping to drive that equilibrium. Our Milton/Alpharetta/ Roswell area consistently fell below the one-month-of-inventory mark in those chaos filled months… meaning that if no new homes came on the market it would take only week or two for inventory of available homes to be zero. Now, inventory sits at approximately 3 months…still a seller’s market (experts consider 6 months to be “neutral”), but certainly it’s a leveling playing field. Most experts anticipate that interest rates too will stabilize around 5.5% which is a solid, palatable rate for buyers.

This leaves us excited for 2023 and the opportunities for buyers, sellers and investors. We are energized by the chance to engage with clients at deeper levels and spend more time evaluating their options and next steps. We see first time homebuyers coming into the market now that they aren’t beating their heads against all-cash buyers or those willing to waive every contingency. We also believe there will be buying opportunities in some second home markets later this year, and small investors are stepping forward to fill some much-needed lease options. If the past three years can be characterized by “chaos” then perhaps 2023 will bring “calm”, which should be a good thing for a while.

For more on some of the hot topics facing the real estate markets please check out The Craft Dolan Team’s “Tastings and Teachings” calendar for 2023. On March 2nd we will host a panel on Aging Parents, a situation we are facing along with many of our clients.