REAL ESTATE Optimism high as homebuyers expected to regain ground in 2023 real estate market

By Jake Busch jbusch@mdjonline.com

The real estate market in Cobb cooled off a bit in 2022 after a red-hot 2021.

As the year came to a close, the total home sales volume in the county declined. It was about $231 million in December, the first month in 2022 that sales volume failed to exceed $250 million.

John Ryan, the chief marketing officer for Georgia Multiple Listing Services, said the steady decline in sales volume from June through December was due in large part to rising interest rates.

“While we see a seasonal decline generally at the end of the year, we saw the start of an accelerated decline,” Ryan said. “Then, as we saw interest rates kind of hold a little bit steady, that decline eased a little bit, so we saw the effect of what interest rates can do.”

The median sale price for a home in Cobb last year peaked in June at $434,000, before dropping to $379,000 in December, according to Ryan.

Ryan said that drop is not as significant as expected after seeing record highs in median price earlier in the year, and it tells him that, with low inventory, prices may drop off a bit more in 2023, “but not a whole lot.”

Sierra Westrick, the new president of the Cobb Association of Realtors, said the first half of 2022 was a seller’s market, with homes selling for higher prices, and selling quickly.

“I am very happy to see that we’re getting back to that place where buyers and sellers can actually negotiate on a contract and come to an agreement with one another,” Westrick said.

The average sale price of a home in Cobb at the start of 2023 is $415,000, according to Westrick, compared to $429,925 in January 2022 and $445,000 in April 2022.

After the mid-2022 peak, Westrick said, the market slowed as prospective homebuyers were turned off by rumblings that others before them had overpaid for homes.

Westrick noted, however, that the market was still active despite the slowdown, with homes on the market for an average of 22 days in December, compared to less than five days in May.

The market has Westrick optimistic about 2023.

Marietta City Councilman Johnny Walker, a real estate agent, is also optimistic about what’s to come.

Walker said demand for homes is still outstripping supply in Cobb, adding that higher interest rates have made it harder for homebuyers, particularly first-time buyers, to find their dream home in a desirable part of metro Atlanta.

While Walker said he’s not expecting 2023 to exceed the flurry of real estate activity in 2022, he’s hopeful interest rates will go down, easing the pressure on buyers in the new year.

There is also optimism for the commercial real estate market in 2023 among local experts. Dan Buyers, a partner at McWhirter Realty Partners, said there is still plenty of activity on the commercial front despite higher construction costs and interest rates since the beginning of 2022.

“Atlanta seems to be better positioned than most any market I can think of in the United States,” Buyers said. “Our diverse population and our workforce makes us attractive for corporate relocations, and so we’re continuing to grow and attract new companies at a time when other metro areas envy Atlanta’s ability to bring in new employers.”

Still, Buyers said the same concerns in other markets, especially regarding unused office space, hold true in Cobb and metro Atlanta. Despite those concerns, Buyers is “cautiously optimistic” about the future of office space here.

The shift of many employees to working from home in the wake of COVID-19 has left office space around the country empty, and Buyers has seen some projections indicating as much as 40% of unoccupied office space in the U.S. will need to be converted to other uses.

The commercial real estate research firm CoStar says the sublease volume for commercial space in metro Atlanta is at a 15-year high. Buyers called it a “concerning trend” and said it is typified by the recent move by Cobbbased Home Depot to make 600,000 square feet of sublease office space available. He noted that CoStar says the office vacancy rate in the metro Atlanta area above 14%, which is higher than average.

Buyers said there is higher demand for office spaces that promote walkability in desirable locations such as The Battery Atlanta and Marietta Square. The same is true, he added, for mixed-use and multi-family developments in Cobb, which he said are also moving forward at a steady pace in cities like Smyrna, despite high construction costs.

In other commercial areas, such as industrial real estate, Buyers said there is reason for optimism.

“Industrial has been so hot for so long. Since even before the COVID, Atlanta’s industrial market’s been exceptionally