Home prices soared last year, up as much as 20%. Will 2022 be another strong year in Atlanta real estate? We asked local realtors to share their predictions for this year.
Cynthia Lippert, Atlanta Realtors Association
Many realtors will have already developed their 2022 business plans. Here are some of the predictions informing the strategy for how best to serve their clients in the next 12 months.
Interest rates are expected to rise in 2022. Economic indicators have been said by several industry sources to signal mortgage rate increases, though opinions on when and by how much are widely varied. But realtors are advising buyers that, in addition to higher prices, which are expected to continue rising throughout 2022, even a small increase in rates will have an impact on purchase power. Waiting it out may not pay off in the long run.
Price increases will continue but possibly less steeply in 2021. The message for sellers is that if 2021 wasn’t the year to sell, 2022 is. The seemingly unstoppable rise in home prices has netted huge gains for sellers, leaving many wondering how much longer until we reached the top of the market. Sellers still have big gains to rake in over the next few months. However, sustained inflation, continued pandemic uncertainty, and the potential for rising interest rates could well undermine buyer demand and slow down that growth. And while we still don’t predict a housing bubble, a gradual rebalancing could make bidding wars and offers over list price less of the norm that sellers have come to expect towards the end of the year.
The inner suburbs of Atlanta, including Sandy Springs, Buckhead, Brookhaven, and Dunwoody will continue to be extremely popular. These areas have historically attracted buyers seeking the perfect balance between intown convenience and a strong community vibe. And as inventory has become more scarce in the last 24 months, it’s only increased the popularity of these sought after communities. However, rising interest rates may undermine purchase power, putting downward pressure on higher priced listings.
Predicting the market is a science of broad strokes, given how many factors influence our industry. And as we’ve seen play out in the last couple of years, it only takes a shift in one of those factors to make a big difference in the outcomes. For example, the way the real estate market responded to the pandemic was really fascinating and impossible to have anticipated. And with so many other factors at play, such as global trade, politics, and of course the effect of an evolving pandemic, the best thing we can do is continue to serve our clients’ needs even as they change. The single most important thing buyers and sellers can do is consult with a realtor to understand how these factors are impacting their market at the local level.
Karen Cannon, Karen Cannon Realtors
After being in the business for many years now, I usually have a good sense of the market and the direction it is headed, but there is nothing normal about the market we experienced this year. The pandemic caused an unusual disruption to the real estate market, and changed up what buyers usually look for in their homes. Based upon what we are seeing now and predictions from market experts, we expect prices to level off some as inventory slowly increases. Prices are still very strong and multiple offers are common. Albeit, buyer fatigue is starting to set in as buyers are becoming weary of the bidding wars, getting beat out or paying far more than what was “market value” just a short time ago.
Homes that are renovated and move-in ready still hold the strongest prices. For a buyer to renovate a home right now with the increased cost of building materials and supply chain issues can be too intimidating and risky. Because of this, new construction is doing very well and getting the strongest prices.
While low inventory is the main driver of the current market, we do sense a shift lurking over the horizon but it’s hard to predict how and when it might play out. There is too much of an imbalance of buyers to homes available so I don’t anticipate anything drastic happening anytime soon. Interest rates are expected to rise, although they will still be historically low. Even so, even if rates increase a half percent, it significantly affects buying power.
Nevertheless, we are still committed, no matter the state of the market, to helping our buyers find homes and getting sellers’ homes in front of the right buyers.
Ashley Battleson, Bayne Battleson Group, Atlanta Fine Homes Sotheby’s International Realty
All current signs point to 2022 being another very strong year in the Atlanta real estate market. The Residential Detached Average Sales Price increased 20% YTD 2021 vs YTD 2020. Inventory continues to be at historically low levels, buyer demand remains extremely high and interest rates remain low. All of these things make for a hot market but as a real estate agent, it also makes it very challenging. The continued inventory shortage will have an impact on home prices increasing.
Robin Blass, Harry Norman Realtors
2022 will continue to be a seller’s market, but a few changes in that we will not see the 24-26% increase of the prior year prices. We will see a normal stable 4-6% increase. Homes will continue to see multiple offers in a few areas if the home has the WOW factor and are priced right to begin with. Any home will sell if it is priced right. Buyers are looking at homes knowing that they must be prepared to offer over the list price. If the home is listed at the highest to begin with, it limits the buyer pool for the home and buyers move on.
The inventory of homes available will continue to be a challenge this year. We have less than a 1-month supply. In a stable market, we would have a 2–4-month supply.
Today’s buyers are exhausted from home searches and the continued rejections of offer after offer. Home purchasing needs will continue to fuel the market as many new buyers enter the market and relocation buyers from all the companies selecting Atlanta as their new home. All of this is exciting, but we need more homes. We are seeing buyers really looking for that home that will be their forever home, for now. The location, schools, and community are very important in the buying process.
Interest rates, for now, are still great and even with the higher home price buyers can secure a great rate and a monthly payment that is doable. Now is a great time to buy. Lending options have evolved with many products for the consumer to choose from. Recently the conforming loan amount was increased allowing a buyer to purchase up to $647,200 with a conventional loan. That is huge. My best advice is to pack your patience and always be ready. This market is crazy.
Patti Junger, Dorsey Alston Realtors
A lack of inventory will continue to be a problem. New listings are down 5.2% year-to-date in Metro Atlanta, while the number of sales are up nearly 20%. This is an indicator of strong demand. This trend holds across every submarket, including Buckhead, Intown and Sandy Springs. We currently have less than two months of inventory in almost every submarket in metro Atlanta, where six months of inventory is considered a balanced market. Therefore, all indications are we will continue to see a seller’s market in 2022. The lack of inventory will continue to push prices upward in the coming year.
Here are some of 2021’s highest-priced home sales in the Buckhead, Brookhaven, Dunwoody and Sandy Springs communities. (Source: Staff research, Realtor.com)
251 Valley Road NW, Atlanta, 30305
Seller’s Agent: N/A
Buyer’s Agent: N/A
165 Valley Road NW, Atlanta, 30305
Seller’s Agent: Studie Young, HOME Real Estate
Buyer’s Agent: Glennis Beacham, Beacham and Company Realtors
4295 Lakehaven Dr. NE, Atlanta, 30319
Seller’s Agents: Kim Boyd, Betsy Akers, Atlanta Fine Homes Sotheby’s International
Buyer’s Agent: Giuliano Tornusciolo, Keller Williams Realty, First Atlanta
1539 Summerford Court, Atlanta, 30338
Seller’s Agent: Karen Cannon, Karen Cannon Realtors Inc.
Buyer’s Agent: Dashondra Mashia, PalmerHouse Properties
4544 Peachtree Dunwoody Road NE, Sandy Springs, 30342
Seller’s Agent: Gwendolyn McKinley, Corey Warren, GG Sells Atlanta Inc.
Buyer’s Agent: Veronica Smith, Solid Source Realty GA