Buckhead Housing Market

In 2022, surging interest rates and rising inflation caused a dramatic shift in the national housing market. As we enter 2023, widespread uncertainty about the future threatens to sideline potential buyers and sellers who wait to see what will happen before making a move. It is hard to know what to believe, with experts predicting everything from a looming recession to minimal change. However, despite the market shifts, new and exciting opportunities for current and future homeowners will likely emerge, especially within the Atlanta housing market. Here are a few thoughts to cut through the fear and noise. In December 2022, during the National Association of Realtors (NAR) fourth annual year-end Real Estate Forecast Summit, Lawrence Yun, the NAR chief economist and senior vice president of research, forecasted that Atlanta would be the top real estate market to watch in 2023 and beyond. When compared to the national average, Atlanta was the only metro area out of 179 others to meet all 10 key metrics. These criteria included better housing affordability, stronger job growth, faster growth in key industry jobs, faster population growth and smaller inventory shortages. According to On the Horizon: Markets to Watch in 2023 and Beyond and the NAR Research Group, “The Atlanta metro area continues to be more affordable than most areas across the country, with more than 20% of the renters able to afford to buy the typical home in the area. The job market is robust, with many major tech companies from the West Coast opening offices, such as Apple, Microsoft, and Visa. As a result, the area experiences substantial migration gains and fast population growth.” As you consider making an investment in the Atlanta residential real estate market, either as a first-time home buyer, a seller or an investor adding to a portfolio, here are some questions to consider: • What do I hope to accomplish by buying or selling? • Where do I want to see myself in five years in terms of home ownership? • What is keeping me from buying or selling? • Have I had a conversation with a trusted real estate advisor to confirm or contradict my market suspicions and to get accurate data surrounding my specific goals? • Have I talked to a trusted mortgage lender to see what I truly can afford since mortgage rates appear to be the number one roadblock to many buyers? Understandably, mortgage rates present an area of uncertainty. Industry experts don’t seem to have a unified forecast when it comes to mortgage rates. For a 30-year fixed rate, today’s predictions vary widely. Some predict it will fall to 5 percent while others believe it will increase to close to double digits by the end of 2023. While the mortgage rates have risen dramatically, let’s not forget that the lower rates we have been enjoying are historically low, and a 3 percent rate is not likely to be back anytime soon. In his article Mortgage Rates Chart: Historical and Current Rate Trends, Peter Miller says,

Emily Ellingwood

YOUR REAL ESTATE EXPERT

c. 678.457.6428 o. 404.874.0300

“Freddie Mac — the main industry source for mortgage rates — has been keeping records since 1971. Between April 1971 and December 2022, 30-year fixed-rate mortgages averaged 7.76%.” Knowledge is the easiest pathway through fear of the unknown. Talking to a mortgage professional to clarify your personal financial readiness will help to eliminate some of the uncertainty surrounding your decision and possibly put you on the path to fulfilling your goals surrounding home ownership. Buyers and sellers are also wondering how drastically home prices will drop. According to John Hunt from MarketNsight, “The months of supply was unchanged from the first week of December at 2.0. Hunt states, “We appear to have peaked at 2.1 months of supply and will see it continue to decline through the first several months of 2023 under normal seasonal conditions. To reach the equilibrium of six months of supply, Atlanta still needs 62,000 units of additional housing inventory over the next 12 months.” The Atlanta market remains a seller’s market, but buyers are experiencing a less frantic buying process with more time to consider their decisions and inspect the sizeable investments they are making. Hunt continues by saying, “The demographic drivers behind the surge in housing demand—which actually started before the pandemic—are still in place. We believe that today’s consumers are in much better shape financially than in 2008 and are far more resilient than some of the experts and alarmist headlines portray.” Because of the low supply and the drop in new listings coming to market, industry experts do not predict housing prices to drop dramatically in the Atlanta market. Regarding the Atlanta market, “It appears that prices are settling into a range similar to the pre-pandemic period and are approaching the 47year average appreciation of 4.6%,” according to the article Is Housing Recovery on the Horizon by MarketNsight. Buckhead offers a plethora of housing options ranging from city lofts to single-family homes in a variety of styles to sprawling estates. Market statistics for Buckhead, as of December 2022, show a strong, viable housing market. Including both attached and detached units, the median sales price is $745,000, up from $671,000 in December of 2021. The average days on market hovers around 28 days, and the close price to list price ratio is 96.2%.

Article by Emily Ellingwood As you consider a home purchase or sale, it is imperative to work with a trusted real estate advisor. At Atlanta Fine Homes Sotheby’s International Realty, our mission is to “guide and care for our clients throughout the home purchase or sale experience by serving them as if we were doing so for our own family.” An extensive network of collaborating agents spans five offices, ranging from Buckhead to North Atlanta to Cobb to Intown to Blue Ridge, not to mention the national and global network of Sotheby’s International Realty. Our staff provides world-class support to each of our agents as they guide their clients through the process of buying or selling a home, one of the most important investments a person can make!

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