The past three years have been challenging for Atlanta homebuyers. With limited inventory and rising prices, it’s been a seller’s market.
However, we are slowly shifting back to a balanced market where buyers will have more choices and less competition.
After a significant price run over the last three years, prices and competition have begun to retract. Likewise, rising mortgage rates have added to the cooling of prices.
Cooling prices could be good news for a buyer in Atlanta this fall. Below are three reasons why this fall could be an excellent time to buy a home in Atlanta.
Over the past three years, one of the ongoing issues has been extremely low inventory levels. Builders struggled to keep up with the high demand and frequently postponed new construction due to high material costs.
Likewise, Atlanta continues to have one of the country’s fastest-growing populations of large cities.
These factors led to a housing shortage in Atlanta which had one of the lowest inventory levels in the country. Ultimately this contributed to the price increases we’ve seen of late.
However, now that some demand has fallen due to rising interest rates, inventory is starting to climb back up. August inventory was at 2 months of supply compared to 1.3 months of supply in August 2021.
The rising supply will alleviate price pressure, making buying opportunities more attractive.
A challenge buyers have faced over the past three years is competition from other buyers. Limited supply and low-interest rates pushed demand and caused prices to increase and homes to be sold for above list price.
Since interest rates are rising, many buyers are temporarily stepping away from the market. This slowing in demand will alleviate some pricing pressure and make a purchase more attractive for buyers.
We’ve already seen this in the last month in Atlanta, where homes fell slightly below the sell-to-list ratio. Additionally, Redfin reported that from a national level, the average home sold for less than its list price for the first time in 17 months.
Lowering prices and rising rents
High rent prices could factor in when deciding whether to rent or buy. While rent price increases have slowed, they are still outpacing home prices.
In July, asking rents were up 14% year-over-year and grew close to 1% month over month.
Compare this to home prices which have been contracting over the last two months. Atlanta home prices are now 5% lower than their June high.
Therefore, it will make sense for buyers to perform a calculation using the increasing cost of rent and whether the best long-term decision is to purchase instead of rent.
Overall, home prices could be more attractive this fall, and if you are in the market for a home, it may make sense to consider buying this fall.
While interest rates are higher than they were in the last three years, there is always the risk that they can tick up higher, so there is no guarantee that they will come down soon. Nevertheless, historically, after steep rises in interest rates, you tend to see them fall back down. When they do fall back down, you would have to option to refinance and lock in a lower rate.
Please contact me if you or someone you know is interested in buying a home this fall. I appreciate your referrals too!