On Tuesday, Feb. 14, 2023, we held a virtual event in partnership with Atlanta Business Chronicle on the state of the residential real estate market in Atlanta, featuring a panel discussion amongst the top leaders in the industry covering home prices, mortgage rates and the second home and luxury markets, as well as potential solutions to housing affordability.
The panelists included:
The residential real estate market is presenting signs of returning to normalcy, with stats and numbers that more closely resemble pre-pandemic trends. David Rubinger, Market President and Publisher of Atlanta Business Chronicles and moderator of the virtual event, presented a series of insight provoking questions to the panelists. Below we highlight some of the discussion, but we encourage you to view the full recording of the full panel on the Atlanta Business Chronicle’s website.
DAVID RUBINGER: Steve, you work directly with both government and business on economic development issues. One key component in recruitment is housing and affordability. Companies won’t relocate to Atlanta if their workers don’t have places to live. What role does housing play in recruitment efforts to bring business to Georgia? Is the price of housing a differentiator for us?
STEVE SMITH: Housing affordability has become much more prevalent in our recent discussions compared to two or three years ago. For us, we work mainly with recruiting investors to cities and to counties, which is largely in commercial real estate. But recently, we’ve had more conversations around residential real estate than we’ve ever had.
DAVID RUBINGER: Jenni, if Steve and his team are successful, that means more and more people will be relocating to the area and will need to find housing. This is great for Harry Norman and your team. But we still have a very tight inventory. Can they find places to live? Have market conditions improved in 2023 compared to last year?
JENNI BONURA: There is tight inventory, but there is still inventory. If you look at Jan 2022, there was about 1 month or less, but for January 2023, it was about 2.2 months which is almost double. We’re still about 40% off of the pre-pandemic inventory levels, but there are definitely options throughout the Metro Atlanta area. You still need to act quickly, but we’re not seeing as many multiple offer scenarios on homes, which is a positive. There’s a return to normalcy that we expect to continue throughout the year.
DAVID RUBINGER: Justin, a year ago, we were sitting at record low interest rates. And today they continue to tick up. You believe that this may not be all bad. Why?
JUSTIN MESSER: As humans we want two things: the things we sell to increase in value and everything we buy to decrease in price; In reality, those two things rarely happen. What we needed was interest rates to increase so there could be a cooldown in housing appreciation. We say ‘cooldown’ but keep in mind that year over year prices are still up and we continue to see prices increase, just not at the rate we saw before. This is where affordability starts to come in. Current homeowners have existing assets and equity to trade up for a new house. But for first time homebuyers who are coming into the market are from a position of renting, they don’t have the property assets to trade up and aren’t benefitting from the increase.
DAVID RUBINGER: Valerie, the role of the interior designer has changed tremendously in the post-pandemic world. What trends have you seen over the past few years that you believe will “stick” with your clients now that the worst of the pandemic is behind us?
VALERIE GARRETT: As we entered Covid, we spent more time in our homes and that trend has largely remained. In the corporate world, there is a roughly 74% hybrid work policy that many U.S. companies have adopted, meaning we are seeing a continuation of people spending more time in their homes. What I saw coming out of Covid was the need for multi-functional spaces and a sense of urgency about making their homes what they want them to be. Current trends that we’re doing a lot of are large format porcelain slabs in a variety of patterns, landscape turf, and multi-generational components.
Check out the full video recording of the 2023 Residential Real Estate Outlook here for expert insight and perspectives on the following topics:
- Over the past few years, metro Atlanta has been red hot for economic development efforts, are there certain parts of town or parts of the state that have become even more attractive? How much of that “attractiveness” is due to housing and affordability?
- Given the rising interest rate environment, do you anticipate more people will be staying in the homes they are in to stay locked into the historic low interest rates? How does this change the market for buyers, sellers, and the residential RE agents serving them?
- If fewer people are moving to new homes, what is the market for renovation these days? And what are homeowners consistently looking to do to update their homes?
- Atlanta remains on a roll as one of the best destinations for housing and relocation in the U.S. What will be the key to keeping our community on top? And what are the “traps” we need to avoid?
For a comprehensive look at the 2023 Metro Atlanta Residential Real Estate Forecast, view our latest report on the HN Insights Hub.