There is a lot of uncertainty in the overall economy, and it’s easy to see that uncertainty trickle down into the real estate market. However, given the widespread supply shortages, I don’t foresee any significant downside changes to the price of homes in the near term. But with rising rates and prices at all-time highs, we could see home prices start to flatten.
We have a long ways to go to get back to a healthy supply, especially in Atlanta, and there is still demand to buy up the available supply.
Notably, pending home sales edged .7% higher in May, which could have been a result of buyers stepping in before rates go higher.
Below I outline the most recent data from a national and local market perspective.
National Market Analysis
The median home price in May was $407,600, up 14.8% from May 2021.
The average number of days homes were on the market in May was 16 days, compared to 17 days in May 2021. Of the homes sold in May, 88% were on the market for less than one month.
The national supply remains low, sitting at 2.6 months in May. These supply challenges are expected to continue in the near term. Total housing inventory is down 4.1% from a year ago.
First-time buyers accounted for 27% of sales in May, down from 31% in May 2021. However, first-time buyers were increasing at the beginning of the year but have slowly decreased over the last quarter as prices and rates have increased. Investors and second-home buyers accounted for 16% of home sales in May, down from 17% in May 2021.
Overall, nationally, we had a relatively flat quarter with a slight slowdown in demand. The southern region of the country had a 2.8% decline in sales in May. However, prices in the south region have increased 20.6% year over year, most likely contributing to the sales decline as buyers get priced out.
We now have a record 123 straight months of year-over-year price increases at the national level, the longest streak on record.
Atlanta Market Analysis
The median Atlanta home sale price in May was $430,000, up 19.4% from May 2021. The median price in May 2021 was 360,000. The Atlanta median sales price continues to outpace the national average.
The average number of days homes have been on the market in May decreased by approximately 21% from May 2021. Atlanta homes remained on the market for an average of 15 days in May 2022 versus 19 days in May 2021.
Supply decreased in May, down approximately 20% from May 2021. Atlanta had 1.2 months of supply in May, much lower than the national supply of 2.6 months.
Home sales have been trending up since the beginning of the year but are starting to level off. Atlanta is in a much more challenging position with supply when compared to the national average. As the city population continues to grow, I suspect we have several years before a healthy supply is reached. Because of this, I don’t anticipate any significant price swings in the Atlanta residential real estate market in the near or intermediate-term.
In summary, deficient supply, rising rates, and high prices should lead to a relatively flat market in the near term. It could be several years until we are at a healthy supply. Until then, I don’t foresee significant fluctuations in the broad residential real estate market prices.
Are you interested in buying or selling a home in 2022?
Navigating a real estate market with limited supply and high prices can be challenging. That’s why working with an experienced agent like myself is crucial to ensure you get the best price and quality.
If you are ready to sell your current home or find a new one, please do not hesitate to contact me.