Atlanta real estate market shifts away from sellers’ advantage: more listings

“There seems to be a shift, and we hope it’s an inflection point,” said broker Kristen Jones, owner of Re/Max Around Atlanta. “We are still at levels well below what is necessary for a balanced market. We need a prolonged period of enrollment growth to offset the historic lows of recent years.

Nearly 18,000 homes were listed for sale in May, about 60% more than a year earlier.

Listings are the simplest way to measure what’s happening in the market. Experts say that when that offer equates to about six months of sales, buyers and sellers have roughly equal bargaining power. The last time the Atlanta market had six months of supply was 2012, according to MarketNsight, which tracks Southeast real estate markets. Since then, the balance has shifted largely in favor of sellers.

At the most extreme, in mid-2022, registrations represented less than a month of sales. Since then, supply has increased slightly, reaching 2.6 months in May, according to Re/Max.

This remains a very good market for sellers.

After Erica Vivar left California to take a job as a lab technician in Atlanta, she “fell in love” with a townhouse in Lilburn, but had to bid against six other offers.

“I asked the broker: ‘What can I do to stand out?’ “, she said. “So, I said I would pay what they asked, $350,000.”

She was unhappy with the mortgage rate – 7%. But she had sold her old house for $500,000, so when she closed on the house a few weeks ago, she reduced the new monthly payment with a 20% down payment, Vivar said. “I know they say prices are going up here, but they’re still cheaper than in California.”

Still, markets are local, so rising prices – coupled with higher mortgage rates – remain a challenge for buyers. Newcomers especially struggle, because even with a decent income, it can be difficult to save enough for a down payment.

One way to get around this problem is to use government-backed loans, either from the Veterans Administration or the Federal Housing Administration. Loans are granted by private companies who generally feel freer to take a small risk since they are guaranteed at least partial repayment in the event of default by the borrower.

Veterans loans are increasingly a way for young people to get housing when they have a less-than-perfect credit history or haven’t had enough time to gather savings, Chris said Birk, vice president of Veterans United, the largest VA. guaranteed lender.

“Some veterinarians would not own without this benefit, and others could do it without problem,” he said. “But about 50% of purchases are for first-time home buyers.”

Typically, a down payment is not required for a VA-guaranteed loan, he said.

For homeowners, the drought of listings was good for their investment, but for potential buyers — including many who are homeowners but want to move — it was like trying to row after a runaway ship.

As of mid-2022, the median price of homes sold in metro Atlanta was up 23.1% from the previous year. But the increase in listings has slowed that tide’s rise: The median sales price last month was up 3.9 percent from a year earlier, according to Georgia Multiple Listing Services.

If listings continue to rise, that’s a positive for all potential buyers, but especially for low-income households, said Marisa Calderon, executive director of Prosperity Now, a nonprofit advocacy and research group that supports more equitable growth.

“This is especially true for the black community in Atlanta,” she said. “A shortage of inventory creates higher costs along with the amount of mortgage payments (East) significantly larger.

The imbalance in the Atlanta market was due to two supply-side problems.

The market depends on homeowners selling their homes to upsize, downsize or move. But rising mortgage rates have “locked in” many who didn’t want to give up their low rates. Nearly 90% of the country’s population Homeowners currently have rates below 6%, and many are well below that, said chief economist Danielle Hale of Realtor.com.

The median price of a metro Atlanta home sold last month was $400,000, but most new construction is priced above what many first-time buyers can afford.

Providence Group, for example, is building a 512-unit complex in Cumming that includes condos, townhomes and single-family homes. Prices range from $500,000 to $800,000.

No problem finding buyers, said Dusty Talbert, Providence Group marketing director. “Demand for housing in the Atlanta area remains strong, even with interest rates where they are today.”

But new homes haven’t been able to fill the void, said John Hunt, director of MarketNsight.

After the building frenzy foundered in the deep recession of 2007-2009, the region experienced years of virtually no housing construction. When construction resumed, it was limited by the high cost of land and zoning restrictions in many municipalities, he said at a recent MarketNsight conference.

With mortgage rates – even for those with impeccable credit – constantly flirting with 7%, decisions about supply and demand are distorted and a return to a balanced market is far away, he said .

“Nothing has been normal since 2019,” Hunt said. “Until mortgage rates are at 5.5%, I don’t know if we’ll ever return to that trend.”

Yet in recent decades, rates were often as high or higher, and home sales continued to grow, so the recent surge in listings could be a sign that consumers may be adapting, said Hunt. “We’re starting to see people getting used to it. »

Housing in Metro Atlanta, May

Median price of homes sold

2020: $254,487

2021: $320,990

2022: $395,000

2023: $385,000

2024: $400,000

Houses put up for sale

2020: 19,352

2021: 7,530

2022: 11,832

2023: 11,832

2024: 17,834

Average rate, 30-year mortgage loan

2020: 3.15%

2021: 2.95%

2022: 5.10%

2023: 6:57%

2024: 7.03%

High rate, rate, 30 year mortgage

1970-1980: 16.35% (1980)

1981-1990: 18.53% (1981)

1991-2000: 9.61% (1991)

2001-2020: 7.18% (2002)

2021-2024: 7.79% (2023)

Sources: Georgia Multiple Listing Services, Re/Max, Federal Home Loan Mortgage Corp.

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