Real estate market predictions for 2023

by Timothy Inklebarger

Featuring the perspectives of:

Tony Adams, Regional Vice President, Kolter Homes
Jeremy Collett, Executive Director of Capital Markets, Guaranteed Rate
Robert Duncan, Vice President and Chief Operating Officer, PalmerHouse Properties
DeAnn Golden, President and CEO, Berkshire Hathaway HomeServices Georgia Properties
Kristen Jones, Broker Owner, RE/MAX Around Atlanta
Samuel Morgan, Director of Sales, Engel & Völkers Atlanta
Kim Nelson, CEO, BankSouth Mortgage
Laura Rittenberg, President, Coldwell Banker Realty – Atlanta
David Tufts, Partner and Chief Development Officer, @properties/Ansley Developer Services

What do you expect for the overall housing market in 2023?

Tony Adams, Kolter Homes: We expect the overall market to stabilize and return to more a predictable growth curve. In some segments that may mean a contraction from the historic spikes experienced over the last couple years.

Jeremy Collett, Guaranteed Rate: We can forecast, but nothing is certain. The Mortgage Bankers Association (MBA) believes that housing prices will likely level off, but the higher-rate environment will mean that fewer homes will sell or refinance in 2023. By buying low in a cooled market, once prices heat up again, the steady build in home equity offers many advantages: dropping PMI (if applicable), taking out a HELOC to invest in home improvements or refinancing with more favorable terms. No matter what, I think we will see a return to seasonality, with a focus on home sales in spring and summer when people are more inclined to move.

DeAnn Golden, Berkshire Hathaway HomeServices Georgia Properties: The market will remain opportunist for those who approach the market with expert counsel and guidance and a true understanding of the opportunities and returns on homeownership. This is especially the case when you view, in proper perspective, the historic landscape of the market over the years and the true value of homeownership and wealth equity growth and preservation through real estate.

According to Lawrence Yun, chief economist for the National Association of REALTORS® (NAR), supply and demand issues will continue to keep prices elevated through the end of 2022. This trend will likely continue in 2023 but at lower levels. Yun forecasts 2022 home sales to be down 15%, a figure he predicts will drop to 7% in 2023. That comes on the heels of a 5.6% jump in 2020 from a flat 2019 and an 8.5% increase in 2021.

Yun added he doesn’t see a repeat of 2007–2008 or “a second real estate bubble” where home values dropped dramatically due to a variety of factors. Instead, Yun sees home values to be up or down 5% in 2023.

Even with inflation and rising mortgage rates, Yun also said it is still a good time to invest in real estate. If there is any benefit to inflation, it is those who have a long-term loan and a mortgage is the biggest debt most people take on in their lives, per Yun.

Consider this example: For a person taking out a $350,000 mortgage for 30 years at a 7% interest rate — assuming a 5% salary increase — they will actually spend 35% of their annual salary on a mortgage in 2022, but just 24% in 2030. Those that are also jumping into the real estate market now, can also refinance even two years down the road when mortgage rates are more favorable.

Homebuyers can also find savings the longer a house is on the market. While homes nationally priced right in desirable locations will never be on the market long, and often got for well above list price, a wait also comes with a reward. NAR found that 51% of homes are sold at or above the list price.

Robert Duncan, PalmerHouse Properties: We expect to see less houses being sold but are expecting pricing to remain stable.

Laura Rittenberg, Coldwell Banker Realty – Atlanta: According to Coldwell Banker’s recently released “The Trend Report,” real estate remains in a strong position for the remainder of 2022 and heading into 2023, especially among the more affluent consumers. Additionally, consumers are over three times more likely to think that 2023 will be a better time to invest in real estate as compared to 2022 — rising a whopping 42% from only 11% a year ago.

Kristen Jones, RE/MAX Around Atlanta: I think the only answer is: It depends. There are so many unknowns with the economy and inflation. We do know two things: Inventory is still very low, and real estate is local. I think we will see appreciation continue to temper or even flatten in some areas. But Atlanta will likely fare better than many parts of the country because of quality of living and job growth. If buyers and sellers take advantage of products like the 2-1 buydown, making it easier for buyers to wrap their heads around buying today, we know that there are still a lot of would-be buyers in the marketplace.

Samuel Morgan, Engel & Völkers Atlanta: We expect inventory levels to remain low as new home construction is still lagging and current homeowners are not going to give up the historically low interest rates they have with their current mortgages. Atlanta’s growth and vitality will keep the market moving. At some point in 2023, we expect interest rates to moderate, leading to an increase in substantial increase in pending sales as there is a great deal of pent-up demand.

Kim Nelson, BankSouth Mortgage: We expect that home purchase transactions will be down 9% year over year and that home prices will remain moderately the same or down 3%.

David Tufts, @properties/Ansley Developer Services: We’ve been in short supply of new construction inventory for so long that we’re anticipating an incredible 2023 with new product that turns over quickly. Additionally, the life cycle of many of our projects is 3-5 years and we’re in the first phase of several of those. Many builders follow the conventional wisdom that in a slower market they should curb construction. But by building in 2023, @properties Development Group is taking advantage of a cyclical market that will prove to be a great opportunity in the coming years. Our projects this year set the stage for inventory that will continue to deliver into 2024 and 2025 when there will be even further demand.

Do you think any segments of the residential market will be better in 2023? (new construction, rural, luxury, etc.)

Collett: It’s hard to predict, and it may vary by market. Remote workplaces have allowed many homebuyers to explore non-urban communities, including smaller towns and even more remote areas. Rising housing demand in Montana and Wyoming is proof of that. Both new and luxury construction will likely remain strong in areas with recession-proof industries. As supply increases and demand wanes, we could see many cities enter buyer’s markets.

The affordable housing market will see some growth with the recent pricing changes instituted by Fannie Mae and Freddie Mac. With home equity so high after the home price increases of the last two-plus years, HELOCs and home equity loans should be popular. Looking at the top end, jumbo and non-qualifying loans, particularly those for real estate investors like debt service coverage ratio (DSCR) programs, will likely continue to grow.

Tufts: The luxury and new construction segments will continue to perform well. New construction will remain steady due to low inventory. Meanwhile, luxury buyers continue to place a premium on the real estate market, banking on predictable, long-term growth opportunities. Luxury sales trends have also evolved in a post-pandemic era with buyers demanding a “new-normal” that affords them a versatile layout conducive to working from home coupled with ample outdoor space.

A great example of this is our Burton project in Georgia. Located on Lake Burton, this is an incredible opportunity to own a home that not only offers inspired architecture but is built to compliment the environment. This development will offer luxury buyers exclusive amenities including access to a marina, spa, restaurants and entertainment.

The Christie’s International Real Estate Luxury Trends Report provides a detailed overview of these trends and how they’re impacting the luxury market.

Rittenberg: More affluent consumers are turning to real estate as a long-term investment strategy, noted in Coldwell Banker’s “The Trend Report.” As noted in the report, 80% of survey respondents agree that real estate is a safe investment, with three out of 10 strongly agreeing with the statement. The top reasons respondents purchase real estate as an investment include diversification of their portfolio, using it as a long-term investment, obtaining financial gain from rental income and using it for generational wealth to provide an inheritance to heirs.

Morgan: Builders have a tremendous backlog of new homes to deliver that will continue through 2023. By the time interest rates moderate, builders will still be behind the curve and inventory will still be scarce so, this segment of the industry will continue to perform better than most. Condominium inventory is still historically low. The cost of new construction condos has all but eliminated new condo development below the $1 million mark. Today, there are approximately 300 new condo units available in Atlanta. This segment will follow new construction in leading the market as demand continues and inventory levels dry up.

Golden: Although many new home builders will enter 2023 with a pipeline of contracts written in 2022, they are anticipating a slowdown in 2023 due to lack of consumer confidence in the economy and rising interest rates. One demographic that may be less affected by rising interest rates is the active adult buyer. Many are cash buyers and have a lot of equity in their current home. If the market stays slow, the 2024 pipeline will be much less for new home builders.

At BHHSGA, we continue to be a market leader in new home sales, representing many builders, as well as luxury properties and all price points of residential resale properties, attached and detached.

Just for further insight, luxury ($1M+) has seen a phenomenal trend in Atlanta. Comparing a 12-month period from July 2007 to July 2022, luxury homes have 38% fewer homes for sale, but 486% more homes sold per Trendgraphix) so we are definitely seeing continued strength in the luxury residential segment.

Jones: New construction is still not keeping up with demand, and many buyers prefer new construction over resale. But the cost of developing in Atlanta has made it nearly impossible for builders to put affordable housing on the ground. If someone can figure that out, homes under $350,000 would sell overnight. I also expect areas outside the major Atlanta metro to fare well. We tell buyers that they may have to “drive until they can buy,” and remote work allows many to do just that.

Nelson: Home affordability is a problem and one that will be hard to overcome, given higher interest rates, new construction regulations, and a lack of housing supply. The demand is here! It is more important than ever for the real estate community to partner with the right lender that offers a varied product offering that includes 100% financing, rural programs like USDA, and down payment assistance programs.

Adams: Better from my perspective means the return of stability so we can manage our business, trade partners and deliverables in a predictable fashion. That has been very challenging to do since 2020.

What growth, if any, do you expect for your company in the next year? Do you expect your business to thrive, decline, or remain stable? Why?

Golden: I expect our company growth to remain solid and stable in 2023. Sales will ultimately be affected by rising mortgage rates and higher inflation, and the Federal Reserve doubling down on their intention to increase interest rates as inflation remains. The flip side is that it is still a good time to buy as housing prices are leveling off. Inflation and Fed interest rate hikes should usher a more measured pace of appreciation versus previous years.

While rentals continue to rise in the market, we value the wealth accumulation opportunities and equity growth that homeownership delivers. We are committed to ensuring that we are communities of homeowners, enjoying all the privileges that homeownership ushers forth.

Rittenberg: In 2022, Coldwell Banker Realty in Atlanta has increased agent count by approximately 21% from January 1 through September 30. We continue to see interest from individuals to enter real estate as a career. Also, Coldwell Banker continues to be a destination for experienced agents to grow their businesses, which includes Atlanta’s premier agents.

Adams: Since Kolter Homes primarily serves active adult homebuyers with our Cresswind brand, we expect a balanced year. The big unknown is what role rising interest rates will have. Typically, interest rates don’t affect our clients directly since many are selling homes that they’ve been in for years to purchase new in a 55+ community. Rates can, however, impact the buying power of the people they’re selling those homes to, so we’re keeping a close eye on that.

Jones: RE/MAX Around Atlanta has always grown during downturns, and I expect we will grow next year. Our agents are more experienced and more productive than the industry average. They have navigated challenging markets and have the wherewithal to survive. When the market shifts, the experienced professional becomes even more critical to the process. As a company, we are prepared to lead our agents through this and are financially sound in terms of debt and cash reserves. We are also in the market for mergers and acquisitions, and this market presents those opportunities. We completed an acquisition last month and are open to looking at others in the year ahead.

Nelson: BankSouth Mortgage remains focused on the real estate community and helping homebuyers with homeownership. We expect that our home purchase loan volume will increase year over year by 10%. We continue to innovate and improve our processes allowing us to be scalable. Additionally, we are consistent in investing in our technology, our people, and our digital platform. We expect that our footprint will grow with our recruiting efforts and possible acquisitions.

Morgan: While the normalization of the market has caused a decline in pending sales, our company remains stable, and we expect a robust 2023.

Collett: The housing market, much like the economy, is cyclical. It never heads in one direction for too long before adjusting. When things slow, opportunities arise to prepare for the next comeback. That way, when the tide does turn — and it will — we are fully prepared to ride the next wave instead of reacting to it in the moment. That’s why we continue to invest in technology to provide the best customer experience possible. We have a strong business plan in place for 2023, which is focused on fully supporting our loan officers. We offer a unique environment to set them up for success, including:

• The CEO Mindset™: When markets cool, winners with the right mindset emerge. The GR philosophy allows LOs to be the CEO of their business. They have a team they can delegate marketing and administrative tasks to so they can focus on growth.
• FastTrack: While banks can take weeks and months to close, our FastTrack program can get customers a CTC (clear to close) as fast as 24 hours and to the closing table as fast as 10 days.
• PowerBid Approval: This helps customers compete with all-cash offers. This fully underwritten credit approval shows sellers that the buyer is a qualified loan candidate and can close at the same speed as an all-cash offer.
• Pricing flexibility to win: Guaranteed Rate’s LOs control their pricing and offer the best array of products to customers, such as Lock ‘N’ Roll, which lets buyers lock in today’s mortgage rate for 90 days while they house shop with no commitment to buy.
• Dynamic Marketing. We have the best-practice model to constantly stay in front of your potential customer network.

What will be the biggest challenges for agents in 2023?

Rittenberg: One of the biggest challenges for agents is not having the tools and resources to adapt to the changing environment and provide an exceptional experience to their clients. Coldwell Banker is making that investment in their agents so that the agents can effectively serve their clients.

Duncan: Agents will be faced with a market that some have never encountered before and they will have to remain focused and driven through this cooling of the market.

Jones: Many agents have not been in business during a market with interest rates over 4% and days on the market over 40. Many have not had to really think through how to properly price a house or had to talk to a seller about a price reduction. Agents need to hone those skills and be prepared to educate their clients with facts, statistics and data so that they can make informed decisions about buying and selling in this market. Every market has its opportunities, and this one is no different.

Morgan: As buyers adjust to the new normal and interest rates moderate, agents are now and once again going to struggle with a lack of inventory.

Golden: Interest rates, lack of inventory and the lack of incentive for current homeowners to sell will be big challenges in 2023. New home inventory will remain low as the Feds pull back on construction lending, builders struggle with high construction costs and buyers hesitate to purchase due to higher interest rates. Homeowners who bought when interest rates were low may put off purchasing a new home due to the higher interest rates. “Why buy a more expensive house at a higher interest rate?” will be a question many agents will hear. Agents will need to be well-versed on financing options and why now is a good time to purchase.

At BHHSGA, Prosperity Mortgage is here for our clients to expertly counsel them and guide them along the path to homeownership. We are fortunate to have a lending firm that is part of the HomeServices of America enterprise and dedicated to our clients’ best interests. In addition, as some first-home buyers have been priced out of the marketplace and are now considering townhome options or are looking further out to stretch their buying power, it’s important to have a guide counseling you as to what is the right choice.

I also predict we will see a decline in real estate agent population, as fully committed and expertly trained professionals will continue to thrive and earn the trust of clients to navigate through these times. At BHHSGA we value being Realtors as not all licensees subscribe to the Code of Ethics and the level of dedication that Realtors do. We commit fully to continually training our sales force to be equipped to respond to changing market conditions for their client’s benefits.

What can agents do to succeed in 2023?

Jones: Right now, the winners will be those who are very clear on their value proposition and can articulate it. Agents need to be focused on lead generation and staying very connected to their database. They need to be leaders and the source of information for their clients. They also need to evaluate where they are spending their money and what ROI they are seeing. They need to be aligned with a company that has been through this before and has the resources to support their agents.

Morgan: Agents need to stay connected to their sphere and provide real market data to help their past and present clients understand what is really happening in the market.

Golden: As we saw back in 2007–2008, when markets slow, it tends to weed out sales agents that were order takers or [just] riding a hot real estate market. Agents will have to work harder and smarter than ever before to, most likely, earn less in a slower market. Getting back to basics will be key. Agents need to focus on their existing client base.

According to NAR, 72% of sellers decided to work with the very first agent they contacted to sell their homes. What’s more, 32% of sellers recommended their agent three or more times after selling their properties, and 85% said they would “definitely recommend” their agent for future services. It is important for agents to stay relevant, top of mind and to deliver value so they are sought out for repeat business by their client base and their referrals. It goes beyond sending out emails, newsletters or holiday cards. You must convey that you are the local real estate market expert and community representative who delivers exemplary service with a true commitment to augmenting people’s real estate wealth accumulation and equity growth. You must make sure to nurture these relationships through active engagement and thoughtful reminders.

Rittenberg: Coldwell Banker agents have been guiding sellers through the process since 1906. They are equipped with local expertise, exclusive tools (such as RealVitalize and RealSure) and state-of-the-art marketing materials to get their client’s home sold for the highest ROI all while easing the stress of the home selling process entirely. If they continue to rely on these tools and marketing strategies, they will have a successful 2023.

Duncan: For agents to succeed in 2023, they are going to need to develop a strategic business plan and stick to it. They will need to ignore detractors and trust their business plan.

Is the work-from-home trend still changing the way people are shopping for homes?

Morgan: While many people are still working remotely, many households have one person working from home and one working in the office or one or more are working on a hybrid schedule with their companies. Worsening traffic is forcing homebuyers to once again consider drive times to work as they make a choice on location.

Jones: Sure. While some have gone back to the office full-time, there are still many people who continue to work from home some, if not all, of the time. They still need the space in their home to be productive and have the flexibility to look at areas without considering commuting.

Golden: These days, more people work from home than ever before; statistics show that as many as 58.6% of people are classified as remote workers. This shift to staying home has brought a lot of changes for many people. In fact, remote work has changed real estate in many ways. Here are the top examples of how remote work and real estate have affected each other in the last couple of years.

1) People are leaving large cities behind. Before the pandemic, most people needed to live a short commute from their jobs since they were going in to work every day. This necessity led to people choosing to live downtown, or at least within a half-hour of a major city, where the highest number of businesses were concentrated. After all, the average commute to work was just under 28 minutes as of 2019.

But now, more people than ever have a much shorter commute, about ten seconds —approximately the time it takes to get from their coffeemaker to their computer at home! This means employees no longer have to worry about living close to downtown workplaces. As a result, ever since 2020, real estate professionals have noticed people moving out of big cities, showing a change in remote work and real estate.

More specifically, big cities with populations of 1 million or more lost the most residents during the pandemic. This includes New York City, Los Angeles, Philadelphia, San Francisco and Chicago. Residents of these cities realized they could get more house for their money by moving to the suburbs, or even rural areas, while still keeping their jobs.

2) More real estate processes are done remotely. Work is not the only task people do remotely these days. People are now accustomed to acquiring so many daily purchases, in the palm of their hands, instantaneously, that the expectation for ease of search and selection is often the same — even when buying their most important financial investment, or at least in the early stages of that search selection. Clients expect at least some aspects of buying real estate to take place online – whether for convenience or time efficiencies. This is especially the case when they’re moving across the country, as they can’t easily take trips out of state every time they want to see the new house or sign paperwork.

Fortunately, most parts of the real estate process can be done online, showing that remote work and real estate can go hand in hand if you have a qualified local market expert guiding you. For example, buyers can look for listings online, communicate with their real estate professional via phone and email and attend virtual tours instead of in-person open houses.

Once they choose a house to buy, they can sign documents digitally and stay in communication with lenders and real estate professionals from anywhere. They can even attend an eClosing—thanks to new options like remote online notarization.

Remote work and real estate have evolved together over the last few years, but I will always be a staunch advocate that real estate is a people business and when you can be in person, face to face experiencing the process, the people and the places, it will augment the experience. So we encourage as much face to face and in person as possible. Communication is 7% words, 38% tonality and 55% interpersonal communication. Since buying a home is a wholistic process, we must be able to fully communicate on all the details and aspects every step of the way.

Communication, education, knowledge and understanding is the crux of every move to provide people with the confidence they are making the right choices.

Rittenberg: The work-from-home trend changes how homebuyers shop for homes and what they are looking for – they want one or more home offices, outdoor kitchens and areas designated for living, working and entertaining. Priorities of the past are not the same as now. People are looking for move-in ready homes and with low inventory, people are willing to pay extra to get something they don’t need to update. Coldwell Banker’s use of the RealVitalize program allows our agents to offer access to having those upgrades made in advance of listing the home, at no upfront cost to the sellers. This allows the sellers to enter the market at a competitive level. In 2021, Coldwell Banker released a study that noted specific trends would have staying power in the next five years, including the desire for a home office (28%), demand for a second home (23%) and the desire for single-detached homes (23%).

What does the landscape of your company look like post-COVID? (Are agents coming back to the office? Do you have more tech? etc.)

Rittenberg: Agents have learned that they can be productive working from home. Our company created a platform for the agents to be productive while working from home – we are seeing agents come to the office for social interaction, collaboration, plus learn best practices from mastermind groups. Agents come to the office to experience the culture we provide.

During COVID, we had a major shift to virtual learning, marketing and conducting business utilizing technology to show homes, work with clients, secure listings and manage transactions. Agents were equipped with the skills and resources to organically generate listing leads to manage their business and generate consistent income despite the pandemic and its inherent challenges. Most of those practices are still in place because agents spend more time in their local communities than going to an office to conduct business.

Jones: Agents are definitely in the office and many never really left. While most of our agents were always working from home, even before COVID, many find that they can be more productive outside of the house and enjoy the camaraderie that comes with being at the office. As for tech, I would not say that we have more tech since COVID. We have had a lot of tech in place for years that made it easy for our agents to work remotely. But I will say that the adoption of that tech skyrocketed during COVID, and that adoption has now become a way of life.

Morgan: Our company has always been tech-forward and, while we still use technology to interact and conduct business, we find our agents enjoy staying connected and engaged in the office and at company functions and neighborhood events outside of our office.

Golden: In general, stats show that 35% of job holders can work from home full time and 23% can do so part-time. Eighty-seven percent of workers offered at least some remote work embrace the opportunity and spend an average of three days a week working from home across all industries.

Many real estate agents are finding the same, that it is not necessary to come back to the office since COVID as most, if not all, real estate processes can now be done remotely. This is especially true in our ecosystem which had advanced to “Smart Offices” back in 2013 with highly collaborative and supportive office structures and regional centers for the for the highly productive and mobile agents.

Showings can be done via virtual tours and the contract process can be done electronically. Many do not see the need for a bricks and sticks office as they can still communicate and join in meetings through Zoom or Teams. Candidly, for nearly three decades I ascribed to the fact that I probably won’t be selling a home to my fellow officemate, so I need to be out with the potential buyer and sellers and referral sources.

My office colleagues, who we will collaborate with to market the properties we are showcasing, grow our knowledge through efforts to be the market leaders, but we can do it in many ways. We also fully respect that others will want the office environment a bit more for the camaraderie and interaction that they experienced prior to COVID, so we have Rethink rooms and collaboration zones and touch down pods along with a high focus on training and engagement opportunities for masterminding and sharing.

Will agents be more important to your business in 2023?

Tufts: Agents have always been the crux of our business and there is a true sense of esprit de corps among our agents and staff. Our access to top talent through @properties and Ansley gives us a competitive edge in everything we do as a company. Additionally, the caliber of our agents is a testimony to the resources we provide them. From coaching and training initiatives to innovative technology, our agents are equipped with the tools to whether any market. And the global network they have access to through our relationship with Christie’s International Real Estate further elevates the value they add to our business.

Adams: Agents are always important. We see our role with Customers as a guide, and we strive to help them make the clearest decisions possible. A knowledgeable agent who shares that same goal is warmly welcomed at our communities.

Will the construction of the BeltLine’s Southside Trail prove to be as effective an economic engine as the Eastside Trail?

Duncan: We believe this new portion of the BeltLine will be an effective economic engine as we have seen in the past. The BeltLine fosters inclusivity for those looking for active areas to live in and have a walkable lifestyle.

Morgan: The Eastside Trail was heavily commercial and industrial which allowed the development of substantial numbers of apartments, condominiums, townhomes, and countless businesses to support and engage those communities. While the Southside Trail does have a substantial portion of commercial/industrial area that is ripe for development, most of the trail moves through residential neighborhoods that do not provide the density the Eastside Trail offers. Homebuyers in these neighborhoods have baked the value of the completed trail into the purchase price of their home today. That coupled with the less dense nature of the Southside Trail leads us to predict that it will not meet or surpass the economic gains of the Eastside Trail.

Golden: Wendy Allen our SVP/Managing Broker of our Historic College Park and Cascade offices shared that similar to the Eastside and Westside trails, Southside trail will help support and grow the traffic to this corridor. The Southside trail is bringing great attention to investors which is bringing more employment opportunities, construction, homes and support of minority businesses. It will mirror the efforts made in the Eastside and Westside trails. We are proud to be a part of this growth and engine driver with our offices and sales professionals that expertly cater to this area.

1.1 million single-family homes have already been built in the area. Affordable housing is also expanding. From a real estate perspective, we see amazing Intown growth along the Southside Trail. Retail will continue to likely follow.

Jones: It certainly has the potential to have a significant impact. The median sales price in the area is well below the median for Atlanta as a whole, making the area more affordable, and there is a lot of available land. We need more affordable housing in this city, so if the developers can offer that, there is huge potential here.

How has the opening of Westside Park affected the Westside real estate market so far? What do you think its longer-term impact will be?

Morgan: The anticipation of the completion of Westside Park has long affected buyer interest and home purchases on the Westside which in turn, pushed prices higher and spurred development in the last five years. This submarket is still emerging, and the park will continue to play a substantial part in driving the development of communities, company relocations and homebuyer interest.

Golden: From the ABC 10/28/22 it was shared that a new 1.2-mile section of the Westside Trail just opened and will be close to the proposed new Microsoft campus and the MARTA Bankhead rail station. Microsoft plans to builder a 90-acre campus for up to 15,000 people. MARTA plans to rehabilitate the station and quadruple train capacity and is working with developers to add housing, offices, retail and a hotel. Mayor Andre Dickens hopes to preserve or create 20,000 units of affordable housing with in eight years. Microsoft has also committed to set aside one-fourth of its campus for affordable housing. The economic engine that Atlanta is providing with jobs and opportunities is a catalyst for sustained positive impact on the housing sector! It’s exciting and yet another reason why we value the opportunity to welcome people home to these vibrant, growing communities to live, work and play!

The opening of the Westside trail has had a direct positive impact on neighborhood growth via the increase of property values which has helped the community see growth in equity. As the equity grows, the median income has increased, and individuals and families looking to relocate in and around the Westside trail can see the growth in the area. It’s attractive! Businesses have been inclined to purchase commercial real estate and open businesses they see the investment that the city is making in the community. For those who do not live in the area, they are still intrigued and attracted to the energy of restaurants, shopping and inviting lifestyle aspects. The housing market in the area continues to show positive growth with residents of Atlanta as well as clients relocating to Atlanta looking at opportunities along the BeltLine. With all four corridors of the BeltLine syncing, it gives buyers and opportunity to live within the city limits within a price median that is attainable. That’s invaluable!

When speaking with one of our associates, Hillary Dukes, she shared that she is specializing in this particular area and has successfully completed several commercial/investment transactions within last 24 months all within beltline and city limits, and more in the pipeline. This is exactly why real estate is local and we cannot allow national headlines to deter us from prime opportunities in our backyards and neighborhoods, especially in the top destination city of Atlanta and, overall, the great state of Georgia.

Will the Midtown apartment building boom continue as interest rates increase and the housing market cools?

Duncan: Yes, I believe the apartment building boom will continue. As interest rates rise, buyers are having to readjust their home ownership dreams due to financial situations. We will also continue to see more people move to the Atlanta area and the apartment buildings are great for people new to the city that are not ready to buy a home right away.

Golden: Unfortunately, whether in Midtown or any town, all experts and signals are showing rent prices will continue to escalate. Rent price growth will likely remain elevated well into 2023, says Realtor.com’s chief economist Danielle Hale. “My expectation is that rent growth will slow, but we may not see it go back to what was typical before the pandemic,” Hale says.

She also predicts that rental demand will remain strong due to rising homeownership costs, especially with mortgage expenses nearly doubling since January. This has forced many would-be homebuyers to stay in the rental market, exacerbating already high demand.

A chronic shortage of housing is another factor. This greatly concerns me as we work so hard to help build a nation of homeowners who can relish all the benefits of homeownership, versus a nation of renters who are not able to capitalize on the opportunities for wealth accumulation through property ownership.

Having been in the real estate profession for nearly three decades, this rapid ascent of rental rates is most concerning as we are continuing to drain the surplus of income that individuals and families could be saving towards a home or savings. Properties that we feel should be renting for under $2,500 are renting for nearly double that amount with multiple applicants vying for the same property. People in need of roofs over their heads, working hard for the income to provide such, are finding this to be devastating. We need to come together as a concerned communities and professionals and work to alleviate this strain on the market with exacerbated rental pricing continually to accelerate.

Our vice president of marketing technology also shares another perspective: Multifamily properties may present a more appealing alternative than single-family homes which are increasingly out of reach for many people. Especially for busy professionals who seek both comfort and convenience in their housing choices.

Between 2013 and 2022, 21,508 apartments were delivered in Atlanta’s downtown area, the most in the U.S. Currently, approximately 7,000 Intown apartments are under construction.

So far this year, multifamily investors have poured $7.5 billion into the purchase of metro Atlanta properties, approximately 23% higher than the same period in 2021, which is telling that this segment will continue to grow in demand.

Valerie Levin, a senior vice president and managing broker of our Midtown and Dunwoody office, also comments that, in her opinion, Atlanta rentals are coming perilously close to Manhattan apartment prices. A one-bedroom apartment in the Midtown area is about $2,300 to $2,500 per month, or more. Yet with Atlanta’s healthy job market, weather and green spaces, it is a more desired place to live. That is why people are relocating here, not just from major cities in the U.S. but from all over the world, so we need to ensure we do not outprice those coming to our great city by making it impossible to find suitable housing.

Morgan: While rising interest rates will affect the availability of capital for apartment construction and this segment may cool, many new communities are already under construction with deliveries projected for 2023 and 2024. Even though this segment will cool, the lack of for sale inventory and affordable for sale housing will continue to drive new apartment construction in Atlanta.

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