Coming off a year where home price appreciation climbed 20%, and even more in some areas, you wouldn’t be alone in wondering what’s on the horizon as we edge closer to the spring housing market. Much has been published nationally demonstrating that we are not in a housing price bubble, and the growth outlook for Atlanta is likely even better than national levels again in 2022. This year is expected be a continuation of 2021, but with greater signs of market seasonality making a return. Inventory levels are expected to improve as sellers take advantage of the opportunity to capitalize on equity growth. These inventory improvements will only be moderate relative to strong buyer demand driven by historically favorable interest rates.
LOOKING AHEAD
Atlanta was recognized as one of the Top 10 Markets to Watch in 2022 in PwC’s Emerging Trends in Real Estate report and was also identified as a “magnet market” – destinations where population, companies, and job opportunities are growing more quickly than the national average. As a magnet market, Atlanta will see high levels of investment property and second home purchases this year, as the wealthy accumulated more wealth during the pandemic and during a time of volatility and travel restrictions, real estate became a favored outlet for investment. Atlanta is one of the most robust investment markets in the US, and in the third quarter of 2021, investor share of Atlanta home sales topped 30%.
CONTINUED HOME PRICE GROWTH
After two consecutive years of record setting jumps, the rapid rise of home appreciation values are anticipated to transition to a much more modest level in 2022. This will result in home price growth deceleration, meaning home prices will continue to increase, but the rate of growth will be lower than experienced in 2021. With strong population growth and overall appeal, Atlanta price appreciation is projected to be at the higher end of the national spectrum, with market wide averages in the range of 7-10%.
BUYER DEMAND
Demographics will undoubtedly influence market dynamics in 2022, as many baby boomers with strong home equity move towards retirement. This is expected to free up traditional, single-family home inventory, while simultaneously increasing demand for higher end, lifestyle-focused retirement communities. Millennials, who are the current, largest home buying segment, moved back home in record numbers during the pandemic, creating opportunity for savings. These accumulated savings are expected to drive increased demand in areas and price brackets with a large share of First Time Home Buyers.
The desire for a home that offers more is expected to be a permanent shift, regardless of the future of the pandemic. People will return to offices but the demand for home offices will continue as it is estimated that about 15% will remain permanently remote, with about 25% in some form of hybrid situation. The greatest design trend will center around bringing the outside in, and bringing the inside out. As people spend more of their time at home, they want to remain connected to nature from the comfort and convenience of their own home. Expect to see a lot of green colors, indoor gardens, and newly-renovated patios as a direct extension of living areas this year.
POPULATION GROWTH
With the number of jobs increasing, the relative affordability of housing, and the city’s tech and film industries thriving, it is no wonder that people from across the nation are flocking to Atlanta. In fact, Atlanta is the third fastest growing city in our nation, and is the second most popular moving destination in the U.S., with the largest inflow of domestic movers coming from New York City and Chicago.
ECONOMIC GROWTH
Georgia’s economy has performed well throughout the past two years, holding strong and regularly delivering growth ahead of national average. In 2022, it is predicted that GDP in Georgia will
increase by 4.3%, outpacing the anticipated 4% national growth. Unemployment rates will continue to be favorable nationally, but will be even stronger in Georgia where it is anticipated to average only 3.2% (4% is considered full employment). The Metro Atlanta area looks even more promising, with unemployment dropping below 2.5% late last year.
WHAT THIS MEANS FOR YOU
These aspects of the Atlanta housing market are priming Atlanta for a successful year, but there are many other aspects involved in understanding the bigger picture. For a more detailed look at the trends driving the market, we encourage you to check out the full Harry Norman, REALTORS® 2022 Metro Atlanta Residential Real Estate Forecast.
As a potential home buyer or seller, knowing the information in this forecast will help you navigate your home journey, but you don’t need to be an expert. The professionals at Harry Norman, REALTORS® have an in-depth understanding of the housing market and an appreciation of unique client needs, which gives them the expertise to guide you with unparalleled insider knowledge. With 17 offices across Atlanta and the greater Georgia area, along with affiliate partnerships extending our reach nationally and internationally, you can be confident that we truly understand the market.
If you are looking for a premium service experience, backed by market leading expertise, contact us today. Let us show you the Harry Norman, REALTORS® difference.
