2022 YTD Market Update

As we enter the second quarter of 2022, housing demand and prices in metro-Atlanta continue to rise. This results in another consecutive month of increased sales prices. Q1 2022 has seen an uptick in pending sales, picking up right where we left off before the 2021 holiday season.

Atlanta has propelled itself to the 8^th spot in the U.S. for largest cities and succeeded in being the southeast’s official largest city, now above Miami. Fueled by the influx of tech, finance, and entertainment jobs, the metro- Atlanta area has added 42,000+ new residents in the past year. Due to its relative affordability compared to its competitors across the West and Northeast Coast and great global connectivity through HJIA, Atlanta finds itself remaining a highly desirable city to relocate to. However, all these factors, including inventory levels continuing to drop, lead to the continued rise in prices with the average home now selling for $503,000. Although we see an incredible increase in demand, Atlanta currently stands at just under 1 months’ supply of homes, similar to where we’ve been for the past 12 months.

As a result of prices continuing to climb, rates are also continuing to rise, now averaging 4.96%. While interest rates have traditionally been a strong influencing factor in buyer demand, it may not be as strongly correlated this time. The overwhelming lack of inventory and surge in demand will continue to remain an issue that puts upward pressure on pricing, almost regardless of interest rates. For comparison, the average interest rate over past 20 years is 8%, so even with a slight increase, loan officers would still offer options at a historically low rate. The likely effect, should interest rates rise to 6%, would be pressure on the lower half of the market, leading to increased demand in that price segment due to compression in the marketplace. While this might have a noticeable effect, it means bidding wars may dwindle down between 3-5 buyers instead of 20-30.

As we continue to make strides through Q2, the most important thing to remember is that, while conditions may fluctuate in response to interest rates, there has never been such a shortage of homes, and that will continue to drive home price appreciation for years to come.

If you have been thinking about selling your house or need assistance in your home search, we are here to help. For more information about market specifics or to speak to one of our seasoned advisors, visit evatlanta.com.