2022 started strong in the housing market with homes selling as soon as they hit the market. Home prices continued to grow for much of the year, by June home prices had appreciated 16.9% nationally. However, as interest rates started rising the housing market began to respond. The change wasn’t immediate, but after consecutive rate rises, the increased cost of home ownership took some heat out of the market as we saw homes slowing begin to take longer to sell. Multiple offer scenarios became less common through the second half of the year and price growth slowed as the housing market demonstrated signs of returning to pre-pandemic normality. Even though it became a little harder to sell a house, in the final quarter of 2022, the average time to sell a home in Atlanta was only 33 days. While longer than prior months, this sales window was still 30% shorter than the same quarter in pre-pandemic 2019.
LOOKING AHEAD AT REAL ESTATE IN 2023
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%.
HOME PRICE GROWTH
Across 2022 most markets experienced notable home value increases, with the national average home price rising 8.6% from the previous year, as the national median price for single-family homes reached $398,500. Individual markets varied, some seeing double digit annual increases, including Atlanta which experienced an annual average sale price increase of 12%, and the median price for single-family homes averaged $396,000 for the year.
In Atlanta home prices spiked across the second quarter of 2022, with active listings reaching a median asking price of $460,000 in June. At the close of the year (Dec 2022) the market cool down saw the median listed price in Atlanta of $410,000, and in the same month the median sold price was $368,000.
Looking forward, with much dependent on inflation and future interest rate movements, 2023 national pricing predictions offer limited certainty. Across a range of housing market forecasts there is a mix of price movement forecasts ranging from price declines of -4% to increases of 5%.
HOME INVENTORY & 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.
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.
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® 2023 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.