Bidding wars. Appraisal shortfalls. Scarce inventory.
Would-be homebuyers who have been struggling to purchase a home in Atlanta’s hyper-competitive market are not likely to find much relief any time soon, according to a roundtable discussion hosted by the Atlanta Business Chronicle.
In some respects, the city is a victim of its own success.
“People love living here, and they’re not leaving,” Harry Norman, REALTORS® President and CEO Jenni Bonura said.
As an example of how competitive things have gotten, she cited a recent open house. The property listed for $650,000 on a Friday and over the following weekend, it saw at least 200 showings and received more than 70 offers, Bonura said. It’s now under contract for more than $800,000.
The factors that have led to the current crunch will likely continue for at least the rest of the year, Prosperity Home Mortgage LLC COO Justin Messer said. Demand for product is not going anywhere, despite rising interest rates and inflation, although the blistering pace of home-price appreciation is likely to moderate from its currently unsustainable rate, he said.
Domonic Purviance, a subject matter expert at the Federal Reserve Bank of Atlanta, however, expects demand to weaken, albeit only slightly, as some potential homeowners are priced out. Record home prices won’t decline, but their growth rate won’t be as high, he said. And as interest rates, which have already topped 4% without an actual increase from the Fed, continue to rise, the market for new homes could see something it hasn’t seen in a long time: Builder incentives, Purviance said, noting that rising-rate environments make the cost of new homes much higher relative to existing residences.
The market for second homes that grew red hot as working from home became the norm during the pandemic is likely here to stay, said Mickey Alam Khan, president of Luxury Portfolio International in New York. In fact, the second-home market can now be considered the “co-primary market,” as wealthy people split time equally between primary residences in high-tax states like New York and California with second homes in low-tax states like Georgia and Florida, he said.