By Kirsten Ricci
It’s hard to believe that 2018 is half over and our real estate market is still hot and momentum is not showing signs of slowing. Here is my state of the market update for 2018.
While national statistics state that pending sales are slower than expected, the deep dive into the data reveals that lack of inventory is the cause. Home prices are on the rise and in our northern suburbs some areas are seeing 5% increases from January to June. Inside the perimeter the market is experiencing even greater growth in high demand areas such as ones with beltline accessibility.
Homes are taking slightly longer to sell in the mid $400s to $650,000 price point, if you fall in that category and are considering making a move you will need to win the beauty contest, with homes needing to be move-in ready, sporting the latest stylings. That is the key, otherwise, you get lost in the mix and end up having to reduce the price to win the buyer. There is less than one month of inventory of homes priced under $400,000. This is having a great effect on neighborhoods that were once considered less desirable; they now see real gains in value due to location and affordability.
The luxury market with homes over $750,000 has over ten months of inventory, which does not include builder shadow inventory. This is a buyers market for the high end, and represents a wonderful opportunity to move up into this arena.
I am asked all of the time about what is driving this demand and if a correction is coming. While I don’t have a crystal ball, there are some facts to consider. We have over 100,000 people relocating to the Atlanta metro area every year, and that trend has been happening for nearly a decade. During the recession builders stopped building and when the recovery began there was a frenzy to purchase and there were low prices, low interest rates and new buyers who absorbed what was available.
So now we have thousands of new people looking for homes, people who lost their homes during the recession are now able to purchase again, and we have the two largest population segments of mature adults and millennials in the home buying market. Also, people are more hesitant to move if they have been in a home less than five years, while on paper they have gained significant equity, the trade-up home could erode the gain due to the rise in home values plus rising interest rates, thus leaving the potential seller to stay put longer. So supply and demand continue to be the main headline along with the fact that our homes have been a great investment.
Kirsten Ricci is a Roswell resident and a Berkshire Hathaway Agent who specializes in residential real estate in the north metro Atlanta area. She can be reached at 678-472-3832, firstname.lastname@example.org. ❍