Atlanta-area housing and rental market predictions for 2023
2022 was a year of escalating interest rates and plunging market activity, as the Federal Reserve attempted to calm the housing hysteria from the year before. The pandemic prompted record-low mortgage rates, converting the market into one where demand outweighed supply, and home sellers benefited over buyers. The post Atlanta-area housing and rental market predictions for 2023 appeared first on The Atlanta Voice.
2022 was a year of escalating interest rates and plunging market activity, as the Federal Reserve attempted to calm the housing hysteria from the year before. The pandemic prompted record-low mortgage rates, converting the market into one where demand outweighed supply, and home sellers benefited over buyers.
In contrast, 2022 introduced record-high interest rates, demotivating buyers from continuing their search for new homes. According to Virginia-based Federal Home Loan Mortgage Company, most commonly known as Freddie Mac, interest rates reached levels that the market hadn’t seen since 2002. While the rate hike helped regulate market activity, it also priced out many potential homebuyers, with the inflation rate surpassing that of the wage increase. According to an annual report by the National Association of Realtors (NAR), inflation rose by about 8% in 2022, while income only rose by 5%.
The year was difficult for renters, as well, with the national median rental price increasing by 4.7% over the course of 2022.
The average rent for an apartment in Atlanta (average size 970 square feet) is $1,880, according to online nationwide apartment renting service RentCafe.com.
However, housing analysts expect more positive outcomes for buyers in 2023, and residents of the Atlanta metro area are anticipated to reap many of the financial benefits.
As it currently stands, the average sale price of a home in Atlanta is $390,000, according to Redfin, an online realtor.
Atlanta’s housing market
The NAR listed the Atlanta-Sandy Springs-Marietta region as the primary housing market to watch this year. According to the organization’s report, Atlanta trumps nearby competing cities and the national average in several categories, including overall job growth, change in active listings and population stability.
Laura Rittenberg, president of Coldwell Banker’s offices in Atlanta and the Carolinas, said Atlanta’s climate, economy and attractions make the city appealing to potential buyers, as well as overall affordability.
“Relative to the rest of the country, Atlanta has always been the most affordable metropolis in the U.S.,” Rittenberg said. “The cost of living in Atlanta provides more bang for the buck. While the average price for a home, according to GAFMLS (Georgia Florida multiple listing service), is $585,589, many are within walking distance to some of the city’s best shopping, eateries and parks.”
Even today, while its housing market is expensive in comparison to others across Georgia, Atlanta boasts one of the more affordable housing markets in the country, when compared to cities similar in size. The NAR assigned Atlanta a housing affordability index rating of 100.7, bested by only two other regions on the organization’s list: Huntsville, Alabama and the Fayetteville-Springdale-Rogers region spanning Arkansas and Missouri.
However, because of the city and surrounding metro area’s size, Rittenberg said it’s not possible to guess the behavior of Atlanta’s housing market as a singular entity. She said that markets within different pockets of the city will behave differently from one another.
“We need to remember that real estate is local and Atlanta is too large and diverse to be able to generalize,” Rittenberg said. “We need to look at each individual sub-market to accurately depict the housing market.”
Rittenberg also said a market’s DOM (days on market) percentage usually indicates the party that the market will benefit – sellers or buyers.
“An upward trend in DOM tends to indicate a move towards a buyer’s market,” Rittenberg said. “A downward trend tends to indicate a move towards [a] seller’s market.”
This year’s days-on-market percentage saw an increase of more than 50% year-over-year, according to data from the First Multiple Listing Service.
Atlanta’s rental market
While rental prices are expected to increase again this year, analysts estimate the increase to be narrower than hikes seen in previous years.
According to a Rent.com study, rent in Atlanta was cheaper on average at the end of 2022 when compared to prices from exactly one year prior. The study also claims Atlanta is the only major city in the southeastern region to experience a year-over-year decline, as opposed to a price increase.
A separate study, conducted by Apartment List, named Atlanta as one of 22 major American cities to experience a year-over-year rental price decrease, claiming prices were cheaper on average by 1.4% from 2021 to 2022. This study asserts that Atlanta and Virginia Beach, Virginia were the only of the 22 ranked cities located in the southeast.
This year also looks promising for renters looking to buy their first home. The NAR’s report predicts that more than 20% of Atlanta residents will be able to afford a home in the area, a percentage surpassing the national average.
Rittenberg said the falling rental prices in the city better prepares renters to choose between buying and continuing to rent.
“With rents averaging $1,529, it is still an opportune time for first-time home buyers to take advantage of home ownership,” Rittenberg said. “Because even with today’s interest rates, the buy-versus-rent option is still very lucrative.”
The post Atlanta-area housing and rental market predictions for 2023 appeared first on The Atlanta Voice.