While predictions are just that, I think it’s safe to say that the 2020 Atlanta real estate market will best be described as “compartmentalized challenges”. Every real estate market is different; each is comprised of micro markets defined by price, age, school districts, design and a myriad of other factors. It is irresponsible and disingenuous to state that the “Atlanta real estate market” is this or that. However, 2020 will be unique as typical factors collide with variables on steroids.
The 2020 Atlanta Real Estate Market…”Because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know”. D. Rumsfeld
- The national headlines have nothing to do with local markets
- Most local markets have been largely balanced for years
- Low interest rates can stimulate markets only so much
- Data contradicts the idea of timing the market
- Pass the popcorn for the 2020 election
The Hyperbole Around Atlanta Real Estate Prices and Inventory
According to the national news, housing prices continue to soar reaching record levels every quarter. Inventory is scarce; letters must be written, over list price offers are the norm and cash is king. Nonsense. I’m in the data every day appraising and selling, the data simply doesn’t support this premise. There are of course exceptions; when that home that has it all hits buttons for many buyers hits the market there will be a brawl, but that isn’t the norm. One of the most popular areas around metro Atlanta is East Cobb, what does the data tell us? Well for homes priced between 600K-900K the data is diametrically opposed to the screaming headlines. Three times over the last 5 years, for about a month at a time, sellers controlled the market. For all of the rest of the time, it’s been a modest to a very strong buyer’s market. There are about 165 homes in this segment on the market as of Sept ’19 – UP from about 100 in Jan ’14. The number of sales maintains a consistent pattern over this same period. And price? About a screaming 2-3% over 5 years – and that’s not considering seller paid closing costs, inspection costs and other concessions.
Seasonal Atlanta Real Estate Cycles
Conventional wisdom states “list in the spring” as that’s the most active period; that is reasonable if active is defined as most homes for sale and most buyers looking. If active is defined as the highest ratio of homes sold to homes listed, data shows that spring is not necessarily the “best” time to buy or sell. While it’s accurate to say that the spring market is busiest in terms of inquiries and traffic, the ratio between number of listings and number of sales is largely consistent throughout the year. The spring will see more buyers but also more listings; the winter will see fewer buyers but fewer listings. It’s like the tides; the boat floats in 60 feet of water as well as in 30 feet of water. Some argue, and I’m one, that a professional agent can sell any home at any time. The winter months tend to see fewer buyers, but the more serious ones. Parts of the greater Atlanta market are rich with relocation buyers; that is a year round bonus for sellers.
Just as with the stock market, don’t try to time the real estate market. When it’s time to sell, sell. When it’s time to buy, buy. Understand the process, practice solid fundamentals and work with professionals.
Politics, the World Economy and the Atlanta Real Estate Market
Many economists continue to warn about the “correction” that’s overdue; rising prices, inventory shortages and the impact of personal debt all playing a role. The Atlanta Real Estate Market is not SF, NYC, Boston, LA or any of the markets that the media loves to focus on. We will see an adjustment, not a crash. Every market is cyclical; this is normal and it will happen here. However, 2020 is also an election year. Not just any one, this election will be one for the ages. President Trump is running a Ferrari economy, but fueling it on credit. The stock market is strong but tariffs and issues with any of several countries rattle investors. The tax cuts were applauded by many, vilified by others. The opposition has been nonstop and led by “new” Democrats; their approach is more about income redistribution, corporate control and programs like the Green New Deal. Joe Biden and Elizabeth Warren are very different and the Democratic Party nomination will be a primer for a national election that is certain to make everyone dizzy. A more stark difference between ideologies cannot exist, nor can the divide between supporters of the two groups. Wall Street and corporate entities are taking notice as well… The Elizabeth Warren stock-market correction will happen sooner than you think.
I’m not an economist and I didn’t sleep at a Holiday Inn last night; but I do this all day, every day. Between appraising and selling, I’m always in the data; everything boils down to the micro market level. The 2020 Atlanta Real Estate Market will bring unique challenges but the fundamentals of a successful purchase or sale remain the same. Above all, avoid the hack agents (even your sister in law, cousin or golf buddy) and work with seasoned pros. Home buyers must clearly define success, act when it presents itself and buy smart because you will be a seller one day. Home sellers must be pragmatists; get a supported idea of value, present it in the best possible light and close the deal. Above all, remember that ALL real estate is hyper local.
Any questions regarding the 2020 Atlanta Real Estate Market? Do not hesitate to give us a call, text (678-428-8276), EMAIL US… we are here to help!