Despite rising interest rates, Atlanta’s real estate market remains hot, and industry experts say there’s no reason to think that will change any time soon.
According to a report released in late May by the Atlanta Realtors Association, housing statistics for the 11-county metro area showed a 13.8% decline in residential sales over the previous year. However, the median sales price and the average sales price hit record highs in April, reaching $412,500 and $500,500 respectively.
Even rising interest rates over the last few months, according to Atlanta Realtors Association President Karen Hatcher, seems to have done little to slow the trend.
“Rising interest rates may have deterred or delayed some buyers, but across price points, demand is still far outpacing supply,” Hatcher said. “Relatively small increases in mortgage rates over the past three months haven’t correlated to significant impacts on home sales, let alone relief for rising prices.”
The average 30-year fixed mortgage rate, according to the Federal Reserve Bank of St. Louis, was 2.8% in January 2021. It climbed to 3.1% in May of that year and has steadily risen since. As of May 11, 2022, the average 30-year fixed mortgage rate was 5.512%, more than double that from the same time last year.
However, local realtors on both the buying and selling side say this increase has done little to damper the enthusiasm of buyers throughout the metro area. Homes are selling over asking prices and with lightning speed.
Michael Culver, a realtor for Keller Williams Realty, said demand remains high throughout metro Atlanta and beyond.
“Even with rising interest rates, the market hasn’t flinched,” Culver said. “5% is still a great rate, and we are still seeing multiple offers over asking (prices) all over the city. We are seeing homes stay on the market [for] only two to three weeks.”
Culver, who represents buyers and sellers from “Lake Jodeco to Lake Lanier,” said when houses are priced reasonably, they continue to sell quickly, even though competition is a little less intense compared to last summer.
“Buyers are getting smarter about what it takes to buy a house, with cash offers, or significant down payments,” he said. “Looking at the market now, I see two or three, if not five more years of this kind of market.”
Sabrina McDonald, a realtor with Karen Cannon Realtors, has seen the booming real estate market as an agent as well as a seller, and now a buyer.
She and her husband decided to sell their Dunwoody Club Forest neighborhood house, where they had resided for 22 years, to take advantage of the hot market.
“The market drove us to sell, and we were looking to downsize anyway,” McDonald said. “Even before we listed it, we had multiple offers, and sold for cash at our asking price. We had received offers $50,000 above our asking price.”
Though the couple had benefited from the hot market, they found themselves in the dilemma of finding an affordable home to buy, even though they were downsizing.
“It was just a fluke that we happened upon a house in Mount Vernon Plantation that was perfect for us,” she said. “But in order to get it, we made an offer that was $10,000 over asking price.”
Two weeks after securing the 1,500-square-foot house for $385,000, two identical homes in the same subdivision went on the market for $40,000 more than the McDonalds had paid.
“We know we have a great investment in this hidden gem,” she said.
As an agent, she is seeing her story duplicated all over Dunwoody, Sandy Springs, Roswell, Alpharetta and Brookhaven, with homeowners selling quickly, often over the asking price.
“I had a house in Mill Glen, which received offers more than $75,000 more than the asking price, only days after going on the market,” she said.
Culver said he is seeing the same. He put a Dunwoody house on the market on a Friday in late May, and by Saturday, had 12 appointments to view the house on Saturday.
“I would not be surprised if I have multiple offers by the end of the weekend,” he said. “If a house is priced correctly, it’s going to go quickly.”
Both Culver and McDonald said buyers are getting more savvy about how they go about purchasing a house, including grabbing homes that are about to go on the market.
“I do lots of previews (of homes that are about to be listed), even if I don’t have a buyer in mind,” Culver said. “Knowing the market is important for realtors in the Metro Atlanta area.”
McDonald said she believes having a local presence is the key for potential homeowners to get the house of their dreams.
“You have to have someone out there fighting for you, someone who knows what you are looking for and what’s coming up,” she said. “There’s homes out there, but you need a realtor ready to work for you.”