After years of a glacial return to the norm alongside eager buyers saving up and searching for the right property at the right time, the real estate market is primed to hit the ground running over the next few months. With countless homeowners waiting for that sign to put their property up for sale, let’s look at how the Atlanta real estate market is looking for home sellers this summer.
We are getting used to seeing the Federal Reserve increase interest rates as a counterbalance to inflation woes, and this has definitely impacted the real estate market. Since March 2022, the base interest rate has increased nine times.
What this means for the average home buyer is greater difficulty in getting approved for a mortgage, and then higher monthly payments once they do purchase their chosen property. The Federal Reserve has indicated that they are doing its best to avoid these interest rate increases, but there’s no telling when it might stop or, even better, begin reversing. This means that sellers need to carefully vet their buyers when going through any offers to try picking not just the best offer but the best buyer that has the highest chance of getting approved for their financing.
If you happen to fall into a position with a buyer that doesn’t need outside financing, consider yourself very lucky.
Low Inventory and Sky-High Demand
Something that has remained consistent for years now in the real estate market is the unwavering, high level of demand for homes. This has driven up prices and led to new homes being snapped up pretty shortly after being put on the market.
Buyers have become accustomed to the idea that there will be fierce competition for any home in which they are interested, and they oftentimes expect to put in an offer that is at, if not above, asking price. This translates to high offers with few contingencies from which sellers can take their pick.
The reason that mainstreamed and solidified this perception of the market and the resulting behavior of buyers is the extremely low inventory of for-sale homes since the spring of 2020. Therefore, even if the inventory of homes increases, it’s going to take a while for the buyer’s perspective to shift in the opposite direction and for the real estate market to stabilize.
More New Construction
Despite the low home inventory, something that is starting to appear is a sharp uptick in new home construction.
The United States Census Bureau and Department of Housing and Urban Development stated that single-family new home construction rose in February of 2023 by 9.8% relative to the previous month. Additionally, the amount of new home construction permits increased by 13.8% compared to January of 2023. This means these new homes that don’t already have a buyer lined up will be hitting the real estate market once they are completed.
More home inventory means more competition for sellers and less extreme offers from motivated buyers.
As the COVID-19 foreclosure and eviction moratorium was allowed to expire, there was a growing fear amongst economists and market forecasters that foreclosure rates would explode. The bigger issue is that a real estate market bubble bursting would cause a ripple effect across all industries and lead to a depression. Luckily, this hasn’t been the case, with foreclosure rates lower than even pre-pandemic levels.
Ultimately, we’re looking at a stable real estate market that is continuing with its trend of rewarding eagle-eyed sellers ready to take the chance to find the right buyer.
Professional Help Navigating the Real Estate Market in Atlanta
If you’re thinking of jumping into the real estate market in Atlanta this summer and would like experienced, knowledgeable guidance, contact us today at (404) 977-5054!