Atlanta Third Quarter Residential Real Estate Market Update

By Charlotte Sears, president of Coldwell Banker Residential Brokerage in Atlanta

Return to a More Healthy Market – The past five years has had its peaks and valleys but things are starting to return to a more healthy real estate market. In 2014, we’ve seen a more typical pattern of seasonality, with a busier spring and summer season followed by a slower late summer and fall. This is a healthier and more stable market.

Price Increases Are Slowing – Prices were still much higher in September over the same month last year, but the rate at which prices are rising is slowing down. The median sales price was $198,000 in September, up 10% over last year ($180,000), and up 46% over September 2012 when it was $135,000. The average sales price in September was $252,965, also up 10% from $229,807 in September 2013. However, the rate of increase is slowing: Average September home prices were down 3% from August, and median sales prices were down 5.3% from August.

First Time Homebuyers – The average sales price in Atlanta buys you a really nice home, even a four-bedroom in the suburbs. In other markets, such as the suburbs of Washington, D.C., a similar home would cost close to $1 million. Atlanta is still one of the most affordable major cities in the US for first-time homebuyers to purchase. So it’s no surprise Atlanta is a very young city and a great place for young professionals, fueled by the low cost of living and number of colleges in the area. The rental market is also on fire and Atlanta is seeing a lot of new apartments coming online, however, rent is high and it’s currently cheaper to purchase an entry-level home than it is to rent.

Inventory – In 2012 and 2013, investors changed the market almost overnight by snatching up inventory, and flippers compounded the inventory shortage. When there is a lack of inventory, prices go up and properly priced properties sell faster. But inventory has jumped since this time last year: There were 18,969 properties on the market in September, which is up 8.9% over last September (17,423). The increase in inventory is slowing the buying/selling process down. Buyers don’t feel the pressure to act as quickly as they did last year, and we are seeing fewer bidding wars and multiple offers.

Pricing Appropriately – While we’ve moved to a more balanced buyer/seller market, many homeowners still think we’re in a seller’s market and are being a bit overzealous on their prices. Homes that are not priced appropriately are not selling. There’s too much competition and too many “comps” (comparable properties nearby that have sold) to show what buyers are willing to pay. We’re also seeing appraisal issues when properties are priced too high.

Recruiting – Atlanta professionals are increasingly seeing real estate as a desirable career. Part of it is the strength of the market, but also, the recession left many professionals disillusioned with the corporate world. How often do you get to reinvent yourself as an adult? Not very often. But real estate allows you to do just that. It’s an attractive business because there’s no entry barrier and education and past experience are not necessarily important. If you have a good work ethic and like talking to people, real estate can be a great career. For example, one of our sales associates overheard a conversation at the St. Regis bar, stopped by and introduced himself, and won a $3.9 million listing. If you’re willing to put yourself out there, real estate can be a very lucrative business.

Charlotte Sears
President
Coldwell Banker Residential Brokerage
Atlanta