Metro Atlanta Home Price Seasonality (Monthly Average Sale Price 2012 to 2022)

How do sale prices align with appraised values?

Earlier this year, home prices were rising rapidly due to intense buyer competition and homes were often appraising below the contract price, requiring buyers to pay the appraisal gap in cash. In April 2022, a record high 20% of homes had an appraisal gap. As mortgage interest rates rose and demand cooled over the summer, offers began to more closely align with appraised home values. By October 22, just 6.3% of homes were appraised below the contract sales price,20 reflecting a market more in line with actual home values.

Will home prices drop dramatically this year?

The question on everyone’s minds as of late has been how far—if at all—homes prices can be expected to drop in 2023. Home price growth in 2023 will vary significantly by region. In Atlanta, there are several fundamental conditions that have prevented dramatic price declines even as interest rates doubled over the course of a year, including:

• Low inventory levels;

• Low construction activity;

• A strong economy; and

• A growing population.

These fundamentals are so strong that the National Association of Realtors (NAR) named Atlanta the #1 housing market in the U.S. with the most potential for growth in 2023. It was also ranked #9 on Zillow’s list of the hottest housing markets for 2023.

Home price forecasts vary widely and are adjusted often, and actual prices will depend on factors like inflation, prevailing mortgage interest rates, unemployment levels, submarket, and individual home quality. Despite forecasts of home prices plateauing or declining slightly on a national level in 2023,21 22 23 24 25, 26 the Atlanta market is forecasted to see home prices grow by at least 5% this year.27

Mortgage interest rates are also expected to level off in the first half of 2023 and gradually decline in the second half of the year, with many economists anticipating rates stabilizing below 6% later in the year. This rate reduction and stabilization would lower the cost of home ownership and increase the sense of certainty in the market, increasing demand by widening the pool of eligible buyers and enabling buyers of all kinds to get more for their money.