We are midway through the year and the housing market remains strong. While sales prices continue to rise, demand has cooled a bit at a national level as many buyers are getting priced out. I view this short-term cooling of demand as a positive, ideally price will take a breather. If the price increase does cool, I expect demand to come back quickly and prices will continue with their upward trend.
The chief economist from National Association of Realtors had this to say in support of ongoing strength into 2022:
“A home price decline is unlikely. However, should it occur, since price gains have been unusually large, it will be of short duration. Many homebuyers would view home price declines as a second-chance opportunity after getting outbid in current multiple-bid market conditions.“
Below is the latest update from Q2 of 2021 for the national and Atlanta markets.
The median home price in May was $350,300, up 24% from May 2020.
The average number of days homes were on the market in May was 17 days, compared to 26 days in May 2020, a 35% decrease. On average a home on the market in May received 5 offers.
Supply remains extremely low, sitting at 2.5 months, favoring sellers. For reference, a balanced supply generally sits a 6 months.
A couple of other interesting statistics I found at the national level, first-time buyers decreased by 9% compared to the same time last year, indicating first-time buyers may be getting priced out of the market, this supports the aforementioned cooling demand. Additionally, vacation home sales are up 60% year over year which may be attributed to the new work from home flexibility.
Overall the housing market is healthy and I expect it to remain this way into 2022.
Atlanta continues to see home prices outpace the national average. Median Atlanta home sale prices were up 26.3% in May, compared to last year. The median home price in May was $360,000 (figure below), slightly above the national median price. Comparatively, in May 2020, the median home price was $285,000.
The average number of days homes have been on the market in May decreased by approximately 70.6%! Atlanta homes remained on the market for 5 days in May, this is 70% less than the national average.
Supply significantly decreased in May, down 57.7% when compared with the same time last year. Atlanta has 1.1 months of supply, much lower than the national supply.
Home values and demand in Atlanta are at all-time highs. We have a real shortage in supply. I believe we can attribute this to being one of the US metro areas that continues to see increased population growth year over year at approximately 1.7%.
I don’t foresee our growth slowing as Atlanta ranks among the best places to live in 2021 and is still one of the most affordable large metro areas compared to its peers.
So what does all this mean for buyers and sellers in Atlanta?
If you’re a seller, it’s your market and should be able to receive a premium for your home in the near future.
If you’re a buyer, I don’t see home prices getting much lower, so I wouldn’t put off looking if you are waiting for the market to abate.
Navigating a strong market like this can be challenging. This is where a veteran real estate agent, like myself, can really help ensure you get the best price for your home whether you are a seller or buyer.
Are you interested in buying or selling your home this summer? If so, please do not hesitate to contact me.