The cool of November slowed metro Atlanta home sales as it typically does, but experts say that with so many potential buyers waiting in the wings, the market should heat up next year.
Nearly 4,000 homes were sold last month in the 12-counties centered on the city of Atlanta, slightly more than the same month of 2023, while the median price also edged up, rising to $397,000, according to the Georgia Multiple Listing Service, which tracks sales.
The overall report sets the stage for a solid 2025, said John Ryan, chief marketing officer for the Georgia MLS. “This looks like kind of a nice ending to the year.”
Among the reasons for optimism is that one of the factors that had been hamstringing the market has been easing. Inventory — that is, the number of homes that are listed for sale — fell to historically low levels in 2022 and has only recently been rebounding.
A lack of listings can make for a distorted market. With few choices, buyers can end up either bidding against each other or retreating to the sidelines to wait for the pendulum to swing.
To measure the market, experts look at the ratio of listings to sales: When listings represent about six months of sales, buyers and sellers have roughly equal negotiating power. When it’s more, then buyers have the upper hand, when it’s less, it is the sellers who rule.
For a time in 2022 and 2023, listings represented less than one month of sales. And for a few months, the median price of a home sold in metro Atlanta was surging at more than a 20% annual pace.
Part of the problem has origins dating back years when homebuilding virtually halted during the Great Recession in 2007-09. U.S. housing supply hasn’t made up the lost ground even as the population grew.
Construction has picked up in the past few years, and some of the growing demand for housing will be satisfied in other ways, like with apartments and other rentals.
For example, Parkland Residential is building 124 townhomes in Fayetteville, two- and three-bedroom townhomes that will be rented when they are finished in about nine months, the company said.
Another more recent part of the problem was the Federal Reserve’s efforts to tame inflation with higher interest rates — a campaign that rippled through to mortgage lending, as well.
The majority of homeowners with mortgages today bought when rates were below 5%.
So as rates — and prices — rose, many potential sellers were “locked in,” afraid that if they sold, their next purchase would not only cost much more, but the higher rates would also mean dramatically higher monthly mortgage payments.
In the first week of December, the average 30-year fixed rate mortgage was 6.69%, according to the Federal Home Loan Bank. That’s much higher than in 2021, but it is down from the 20-year high of near 8% reached in the fall of 2023.
Homeowners who wanted to move see that decline and they also know the value of their current home has shot up — about 60% nationally in the past five years, according to U.S. Federal Housing Finance Agency.
And the longer a homeowner’s tenure, the more of the mortgage he or she has paid off and the more equity they have — that is, the higher share of the value they will gain if they sell, Ryan said. “There’s so much equity built into the market. And people can put that into a down payment toward the cost of moving to a higher-priced property.”
That has convinced more footloose owners to put their homes on the market, he said.
The Georgia MLS said the number of listings last month was about 44% higher than a year earlier, because of both new homebuilding and the increased willingness of owners to put their homes on the market, Ryan said.
About 62% of all owners have mortgages, according to CoreLogic, an information and analytics company. The average Georgia homeowner’s equity grew by $4,000 in the past year, CoreLogic said.
A real burst of buying is still a couple months off.
With so many buyers preparing for the holidays, spending the end of the year in the malls, the kitchen, airports or on the road, some sellers pull their listings off the market, awaiting the turn of the calendar. But the trend toward more listings has been steady and there is plenty of pent-up demand for housing, whether young professionals starting families or new arrivals to the Atlanta area, said Kristen Jones, owner of Re/Max Around Atlanta.
“As for interest rates, while they’re challenging, consumers seem to have come to terms with the reality that rates below 5% are unlikely in the foreseeable future,” she said. “Buyers right now have some leverage, with sellers more willing to negotiate on price and concessions.”
Experts also say the housing market will also be subject to the ebb and flow of the broader economy — job and income growth, demographic changes, inflation and other drags on household wealth.
Some of that will be shaped by the incoming presidential administration, but how — and how much — remains uncertain.
During the campaign, President-elect Donald Trump vowed massive deportation of undocumented immigrants, many of whom work in construction. He also promised to impose aggressive tariffs that could raise costs of imports, including materials used in many homes.
“We do use a lot of Canadian lumber,” Ryan said.
Credit: Miguel Martinez-Jimenez
Credit: Miguel Martinez-Jimenez
Metro Atlanta’s housing market by the numbers
Metro Atlanta* housing, November
Units sold: 3,987
Median price: $397,000
Listings: 17,952
Change from November 2023 to November 2024
Units sold: 2.6%
Median price: 0.5%
Listings: 43.8%
*Data includes the dozen counties centered on Atlanta
Source: Georgia Multiple Listing Service
