Was I Right? Reflecting on Atlanta’s Real Estate Market
I hope you enjoyed a wonderful Thanksgiving filled with warmth and gratitude. As we embrace the holiday spirit, I thought it would be an ideal time to look back on the predictions I made a little over six months ago, back in May. At that time, I shared insights indicating that we were at the pinnacle of the market in terms of buyer demand. Let’s revisit those predictions and see how they’ve unfolded.
Interest Rate Hikes and Their Impact
Around the time of my previous newsletter, the Federal Reserve had announced their intentions to hike benchmark interest rates. Fast forward to today, and we’ve seen over six rate increases throughout the year. These hikes have led to rates climbing much higher and faster than many, including myself, had initially anticipated.
Predictions from 6 Months Ago
Here’s a quick recap of the predictions I made back then:
- Drastic Decrease in Buyer Demand Due to Rising Rates: As expected, the surge in interest rates did lead to a significant reduction in buyer demand.
- Low Inventory: Sellers chose to remain in their homes, resulting in a persistent shortage of available inventory.
- Price Appreciation of 4-6%: Since last November, we’ve witnessed prices rise by approximately 4.3%, in line with the predicted range.
- Market Slowdown: The market indeed slowed down, with factors like inflation and rising rates playing a significant role.
What’s on the Horizon
Inflation, while slightly lower than its peak in July, remains a significant concern. As a result, it’s a safe bet that mortgage rates will either remain steady or experience slight increases. Currently, a 30-year mortgage hovers above 7%, aimed at combatting inflation.
It’s worth noting that in recent years, we’ve observed a deviation from the traditional seasonality of the real estate market. However, coupled with the impact of rate increases, we’ve seen a decrease in sales volume, dropping by approximately 30% compared to October 2021.
Looking ahead, we find ourselves in a market that has cooled down, with stable prices. Most individuals making moves today are doing so because of significant life events, rather than simply trading up or capitalizing on their home equity.
I anticipate that our real estate market will remain robust. Sales volume is likely to rebound once buyers and sellers gain more certainty that this market reflects the new reality. Furthermore, if and when rates return to around 5%, we can expect a substantial increase in buyer demand.
So far, my predictions have aligned with the market’s trajectory, but as we peer into the crystal ball for the coming year, we’ll continue to monitor and adapt to Atlanta’s evolving real estate landscape. Stay tuned for more insights and updates on the exciting journey ahead.
If you have any questions or seek personalized advice about Atlanta’s real estate market, please don’t hesitate to reach out. Your real estate goals are my top priority.