The metro Atlanta housing market roared into spring with prices up 20% last month from a year earlier, driven by cash and corporate buying that could squeeze out many young purchasers.
A scarcity of homes listed for sale intensified the competition among potential buyers in March, pushing the median price of a home in the 12-county region to nearly $377,000 — an average of $8,481 above the sellers’ asking prices, according to the Georgia Multiple Listing Service.
The tilt in favor of sellers shows no sign of leveling off, said John Ryan, the company’s chief marketing officer. “It could be at least two years before the supply of homes evens out.”
The number of homes listed for sale has been historically low for months and it dipped again in March, even though many potential buyers are searching for homes.
For buyers and sellers to have roughly equal negotiating power, the number of homes listed for sale should represent at least six months of sales, expert say. Currently listings are closer to one month of sales, forcing wannabe buyers into competition with each other, especially for the lower-priced homes that attract first-time purchasers.
Moreover, typical buyers who must obtain a mortgage to make the purchase are at a disadvantage: Cash offers accounted for more than one in every four sales, most of them hedge funds and other investment groups, Ryan said.
The recent run-up in mortgage rates will only make a purchase more of a challenge by raising the monthly cost of borrowing.
“The rise in prices the past few years had been partly offset by lower rates,” Ryan said. “A lot of first-time buyers will be pinched out of the market.”
Short-term lending rates have been near zero since early 2020, but the Federal Reserve has begun lifting them in an effort to blunt inflation. Mortgage rates don’t move in lockstep with the Fed, but they typically respond to a market in which borrowing is becoming more expensive.
The average mortgage rate for a 30-year fixed mortgage hit bottom at 2.65% last year before edging higher. As 2022 began, it was still only 3.11%, but by the end of this week, it was hovering near 5%.
That is still well below the historic average for mortgage rates. Between the late 1960s and 2009, the average mortgage rate was never below 5%, according to the Federal Reserve Bank of St. Louis.
More important is the supply of homes for sale, said Kristen Jones, owner and broker at Re/Max Around Atlanta. “Until that starts to move, I can’t say that interest rates, or any other economic factor, are having a significant impact on the housing market.”
March metro Atlanta home sales, compared with a year earlier
Number of sales: -11.0%
Number of listings: -5.4%
Median sales price: +20.1%
Median price, ten most expensive metro counties
Fulton: $632,689
Forsyth: $620,416
Cobb: $475,249
DeKalb: $475,232
Cherokee: $474,568
Gwinnett: $450,537
Fayette: $446,303
Hall: $419,382
Coweta: $386,906
Walton: $380,394
Paulding: $375,835
Metro counties with most homes listed for sale
Fulton: 1,007
Gwinnett: 784
DeKalb: 641
Cobb: 579
Henry: 318
Cherokee: 282
Hall: 269
Paulding: 248
Forsyth: 218
Clayton: 207
Walton: 190
Douglas: 189
Coweta: 174
Fayette: 133
Rockdale: 128
Median sales price, core metro counties
Fulton: $632,689
Cobb: $475,249
DeKalb: $475,232
Gwinnett: $450,537
Clayton: $261,302
Metro counties with most homes sold
Gwinnett: 933
Fulton: 878
Cobb: 739
DeKalb: 641
Henry: 447
Cherokee: 356
Paulding: 322
Clayton: 308
Forsyth: 258
Source: Georgia Multiple Listing Service
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