After a great year for the Atlanta Real Estate Market in 2018, this year should be another positive one to follow. Not without it’s challenges, of course, so here are a few things to keep in mind looking forward.
Average sales price grew 7% from 2017 to 2018, with the average home price now selling for $311,000. However, the price gap between homes listed for sale and homes that actually sold was $202,000. This reflects a high demand for homes at a lower price point, and not enough inventory to serve it. However, the Atlanta metro area will see an increase of inventory in 2019, from various price points.
The increase in inventory is expected to reach a 6-month’s supply of homes by the end of the year, which should help put downward pressure on the home price jumps, and have a positive impact on affordability. In 2018, Metro Atlanta experienced a pretty consistent 2-4 month supply of homes, which is considered a “sellers market”, so climbing to a 6 month supply will mean a more neutral market, giving buyers more opportunity when it comes to purchasing a home.
Interest rates are a more recent hot topic with our ever-changing market. With rates currently hovering around 4.5%, they are expected to increase to around 5.2% by the end of the year. Even still, we are at a historical low considering the 18% mortgage rates back in the early 80’s (Can you imagine!?). However, this does impact purchasing power for buyers, giving them less house for the same monthly payment. The message here? Don’t wait to buy a home this year just for the sake of waiting.
All of these factors aside, Atlanta is still one of the most affordable cities in the U.S, and the voice for a more work/play/live lifestyle with less commuting, better transportation, and an eco friendly environment is being heard loud and clear. This year, Atlanta will start to see condominium conversions, which takes current apartments and converts them into “for sale” units instead of strictly leasing. This transition is expected to help residents get inside the perimeter at a lower price point, and take advantage of the lifestyle offered inside the city. Additionally, there are many organizations on a city and state wide level working to create more affordable housing options all over metro Atlanta, including the potential of tiny homes.
This is an exciting time for Atlanta as we are experiencing so much growth and development, which will in turn help us to thrive. Home ownership plays an important role for singles, families, millennials, baby boomers, and every generation and circumstance out there. Everyone has the right to own a home, and our team is committed to helping our clients do so, under any market conditions.
To receive a copy of the 2019 Forecast, please contact Sarah Alter, our newest team member. She can send a digital copy.