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Atlanta's Real Estate Market: The Current Climate for Buyers and Sellers

CEO Khai Intela
Photograph by iStock / Getty Images Plus If you've been keeping an eye on the Atlanta real estate market, you're probably wondering what's happening. After a pandemic-driven boom, rising interest rates are finally slowing things...

Atlanta housing market August 2022 Photograph by iStock / Getty Images Plus

If you've been keeping an eye on the Atlanta real estate market, you're probably wondering what's happening. After a pandemic-driven boom, rising interest rates are finally slowing things down. The days of bidding wars and houses selling within days are becoming less common. So, what does this mean for buyers and sellers? Let's dive into the current climate and get some insights from industry experts.

Competition is Decreasing; Buyers Can Take a Breather

During the past two years, Atlanta experienced a hot housing market fueled by low interest rates, pandemic stress, and a housing shortage. Prices soared, and buyers rushed to make offers with attractive terms, leading to bidding wars. However, with rates on the rise and the market cooling off, buyers now have more time to make well-considered decisions.

According to Kam Williams, broker and owner of Kam Williams Realty Group, buyers are feeling relieved. They no longer have to rush to view properties within minutes of them hitting the market. They can take their time, attend open houses, and make more informed choices. This change of pace allows buyers to avoid making hasty decisions they might later regret.

Real estate agents recommend keeping contingencies that depend on inspections and appraisals intact. Additionally, buyers can make offers more enticing by offering shorter due diligence periods, substantial earnest money deposits, and temporary occupancy for the seller at no cost. These concessions can sweeten the deal in this new market climate.

Rising Interest Rates Bring New Affordability Challenges

Higher interest rates mean buyers' budgets don't stretch as far, particularly for homes under $500,000 and first-time buyers. Those looking for mortgages may find it harder to afford their dream homes as the additional funds they would have paid over the asking price now go toward higher interest rates.

While rising interest rates can slow down the market and result in a more stable environment, they also contribute to increased rental prices. Buyers should carefully assess their financial situation and consider local financing options. Refinancing remains a possibility in the future, providing some flexibility.

Inventory is Increasing

According to a recent Redfin report, there has been a 12.8% increase in the number of houses on the market for more than 30 days. This increase in inventory gives buyers more options and an advantage in what was previously a strongly seller-oriented market.

However, new construction is still lagging due to ongoing supply chain issues. Builders are facing challenges, impacting the availability of new homes. Despite this, more options on the market and price reductions are becoming more common. Buyers can ask their agents to set up searches for homes with recent price drops, indicating motivated sellers.

High Prices Remain the Norm, with Some Neighborhoods More Active

Although inventory is increasing, Atlanta's housing market still experiences high prices. Lowering listing prices remains uncommon, and stabilizing prices are staying steady. In neighborhoods such as Inman Park, Candler Park, Ansley Park, and Morningside, homes, particularly those under $1 million, are still in high demand. These areas continue to attract out-of-state buyers, offering an affordable alternative compared to New York and California prices.

In contrast, higher-priced properties in neighborhoods like Buckhead may experience stagnation, which presents opportunities for more affluent buyers.

Adjusting Expectations for Sellers

While some areas remain strong for sellers, others are shifting toward a buyer's market. To succeed, sellers may need to put more effort into preparing their homes for listing.

In addition to necessary repairs, sellers should consider simple yet effective strategies like fresh paint, professional staging and styling, and high-quality photography for their listings. Appraisal gaps are less common, which reduces the need for buyers to pay the difference in cash. Sellers are also more willing to make concessions regarding inspections and closing costs.

Sellers should be patient and recalibrate their expectations, as it may take longer to receive offers. However, for those looking to downsize or take advantage of their equity, now may be an opportune time to sell.

Don't Wait for Interest Rates; Explore Local Financing

When it comes to timing home buying or selling based on interest rates, experts advise against speculation. Instead, it's crucial to find a home that suits your needs and consider the various financing options available. Interest rates fluctuate, and waiting for them to drop may not be worth it if prices remain steady or continue to rise.

Having a trusted realtor with relationships with lenders who can explore creative financing options is essential. Local financing and appraisals play a crucial role in ensuring a smooth transaction process. Exploring alternative financing strategies like adjustable rate mortgages, buying down rates, or putting less money down can help buyers enter the market.

Remember, refinancing is an option if interest rates go down again, so buyers shouldn't be overly concerned about slight fluctuations in rates.

In conclusion, Atlanta's real estate market is experiencing a slowdown, but prices remain high. Buyers can take advantage of decreased competition, while sellers may need to adjust their expectations. It's vital to make informed decisions and work with knowledgeable professionals to navigate this changing market successfully.

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