Despite much of the uncertainty over the last two years, the Atlanta real estate market has been highly resilient and remains one of the top markets in the country.
Because of the extraordinary performance, I am frequently asked whether or not we can expect this resilience and performance in 2022.
My answer is always “it depends”. There are many unknown economic variables right now. However, current data and observations suggest that Atlanta will continue to show its strength in 2022.
Here are some thoughts I have on Atlanta’s Residential Real Estate market in 2022 based on what I see as an agent and what the data tells us.
Supply and demand
As the population of Atlanta continues to grow due to its business-friendly environment and tech opportunities, I believe that there will be continued demand for residential real estate in 2022.
Population growth especially among millennial home buyers coupled with ongoing builder supply shortages will to our pressure on supply. I expect this to remain throughout 2022 and we will continue to have a seller’s market.
Currently, supply sits close to its 3 year low at 1.3 months. Much of this low is in line with the seasonality of the market. Nevertheless, the shortage continues and is expected to continue in 2022.
With the supply pressure continuing into 2022 I don’t expect home prices to fall. However, I do expect prices to stabilize.
The pace of growth should normalize in 2022. Economists are forecasting a national growth rate of 2.9% compared to the 12% rise we saw in 2021.
Interest rates are expected to rise in 2022. Real estate economists expect mortgage rates to rise to 3.3-3.6% in 2022. This is approximately a one percentage point increase from the lows in 2021.
With home prices at all-time highs, this percentage point can make a big difference in monthly mortgage payments, especially for first-time buyers on a tight budget. As such, rising mortgage rates will cause some buyers to step away, relieving some pricing and supply pressure.
What should you do if you’re a buyer?
If you are a buyer then I recommend making the following considerations when putting together your buying strategy.
- Consider taking advantage of the seasonal slow down during January and February. While supply may be lower, so will competition, so there will be less pressure on making a decision.
- Consider buying earlier in the year than later so you can lock in a better rate. Economists expect the rates to be the highest in the back half of the year.
- Work with a seasoned broker, like myself, who understands the market and can help you navigate the current environment. This will help you get the right home in the right location at the right price for your budget.
I expect the Atlanta market to remain strong in 2022. There will be continued pressure on supply but prices should normalize. Mortgage rates are expected to rise incrementally through the year so it may be better to be a buyer earlier in the year than later.
If you are interested in buying or selling a home in the new year, please contact me here. I would be happy to help you.