Atlanta has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. What are the Atlanta real estate market predictions for 2020? Atlanta home prices on average are less expensive than the national average of $230,000. Despite being below the national average, Atlanta home prices have more than doubled since 2012, and are projected to continue increasing. Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home prices in Atlanta have appreciated by roughly 63% from $184,000 to $299,308.
The Zillow Buyer-Seller Index (BSI) shows that Atlanta is currently a cool buyer’s real estate market. This is computed monthly. According to their index, there exists a general lack of demand in Atlanta, and homes can linger on the market longer and ultimately sell for less, putting negotiating power in the hands of buyers. In other words, based on the last month’s key housing market indicators, current supply is exceeding the demand, giving buyers an advantage over sellers in price negotiations. When there are more homes available for sale than buyers to purchase them, those buyers are enjoying a cold market.
Atlanta home values have gone up 3.4% over the past year and Zillow predicts they will fall within the next year. The latest Atlanta real estate market forecast is that the home prices may decrease by 1.5% – in the next twelve months. It may be perhaps due to COVID-19 that has led to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. That's how the prices remain flat or drop.
The question now is what happens moving forward. Is Atlanta is going to remain a seller's real estate market amid the ongoing Coronavirus pandemic, which no one knows when it is going to end? These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers have taken their homes off the market. The decrease in the number of active listings indicates that new sellers are still not willing to put their homes on the market until the pandemic or its threat is completely over.
At the same time, the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges. While some economic activity will resume as the state gradually reopens, the housing market is expected to remain sluggish for the next couple of months until the economy opens up completely. Sellers, brokers, and homebuyers seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic.
The constraint on available inventory and a decline in new listings is keeping the Atlanta real estate market skewed to sellers. Atlanta and the entire 11-county metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term. The Atlanta real estate market benefits from a large and robust economy.
According to the data insights provided by the Bureau of Economic Analysis, the Atlanta metro area was the tenth-largest in the U.S. and among the top 20-largest in the world (as of 2020). The housing demand in Atlanta is still high, according to online real estate brokerage SimpleShowing. To counter the effects of this ongoing crisis, FED did an emergency rate cut which put rates at their lowest level in the last 50-year span.
The low-interest rates are already leading to an increase in mortgage applications. Buyers looking to this opportunity to invest or buy a house. Low-interest rates coupled with Atlanta’s solid job market could be a boon for the local real estate market even in the time of the Covid-19 pandemic. Keeping aside the short-term effects of Covid-19 which would hopefully end, the Atlanta housing market is strong. There are no signs of weakness in the Atlanta real estate prices.
In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Atlanta can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. This housing market is skewed to sellers due to persistent imbalance in supply and demand.
We think Atlanta would be a balanced real estate market for the remainder of this year. Sales are likely to decline over the coming months as well, especially if the metro areas continue to struggle with a sharp rise in coronavirus cases. In the current cycle, the home prices may remain flat or drop a bit in the coming months to favor buyers. That was a much-awaited condition for homebuyers who cannot afford a home in the median price.
This means you can probably buy a home for less than list price, and the seller might be willing to pay some or all of your closing costs. If buyer demand eases, we could see a positive influence on the low inventory of Atlanta while at the same time seeing a negative impact on sales. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.
For buyers in Atlanta, the inventory is relatively increasing & mortgage rates are at their lowest. Currently, the inventory remains relatively higher in Atlanta due to COVID-19. There are more homes for sale than there are buyers and homeowners are becoming more and more eager to sell their property. There could be a slump in the Atlanta real estate market in 2020. However, with a strong economy and an increasing inventory of homes for sale, it could be a great time for home buyers.
Atlanta home prices are predicted to remain flat or fall by one to two percent during the next twelve months. Also, if listings linger on the market for longer, buyers have a special edge in negotiating sales prices. As a result, buyers who enter the market at this should have more options than usual when it comes to choosing a property. So they should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars.
Nationally, the housing market is heating up with an increase in home buying despite the COVID-19 pandemic. The real estate sector has been one of the most resilient areas of the economy during the severe economic shutdown. The latest housing market trend to be seen is that the lack of supply is leading to a decline in existing home sales even though new home sales have jumped nearly 13% year over year.
Please do not make any real estate or financial decisions based solely on the information found within this article. Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Many variables could potentially impact the value of a home in Atlanta in 2020 (or any other market) and some of these variables are impossible to predict in advance. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control.
Article courtesy of Norada Real Estate Investments
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