Featuring the perspectives of local brokerage executives:
Jenni Bonura
President and CEO, Harry Norman REALTORS®
DeAnn Golden
President and CEO, Berkshire Hathaway HomeServices Georgia Properties
Christa Huffstickler
Founder and CEO, License Partner, Engel & Völkers Atlanta and North Georgia Mountains
Kristen Jones
Broker/Owner, RE/MAX Around Atlanta
Bill Murray
Managing Director, COMPASS
What do you expect for the overall housing market for 2024? Up, down or stable? Why?
Christa Huffstickler: I think it is going to be a very similar landscape as what we saw in 2023 from the perspective of low inventory and reluctant would be Sellers, but I do think those Buyers who have been living in “The Great Pause” are finally starting to move off the fence and will continue to do so through 2024. When rates hiked, we saw many people either remove themselves from the market because they wanted to wait for rates to go down, they were renters who with low rates made buying a much smarter option or they were marginal buyers (able to buy merely because rates were so low that it put them within debt to income reach). However, you can only wait so long and I think people are still experiencing life changes (getting married, having a baby, relocating) and are tired of waiting.
DeAnn Golden: The Atlanta housing market in 2024 is expected to follow the national trend of higher home prices. This expectation is driven by several factors that impact not just Atlanta but the entire market. Atlanta, like many cities, is facing a shortage of available homes compared to the demand, leading to increased competition among buyers and ultimately driving prices up. Lawrence Yun, the NAR chief economist, predicts a 2.6% increase in home prices for 2024, underscoring the overall lack of housing supply.
In Atlanta, we might see some differences in specific areas, but the big picture is influenced by factors such as the housing shortage, demographics, and the potential for a slight drop in mortgage rates. More young people, mainly Millennials, are getting to the age where they want to buy homes. This is expected to make prices go up, which matches what experts at Freddie Mac have also predicted.
For potential homebuyers in Atlanta, these projections suggest that they may continue to face affordability challenges and strong competition in the housing market in 2024. It’s essential for local buyers to stay informed about market conditions and explore options like different neighborhoods or housing types to navigate the competitive landscape. We recommend that buyers keep an eye on potential policy changes and economic shifts, as these can impact the housing market’s direction.
Kristen Jones: In many ways, 2024 will look very similar to 2023. Low inventory levels will continue, and interest rates will likely remain elevated. There may be more pressure on rates in the second half of 2024, causing them to decrease slightly. We will also start to see more buyers move away from the traditional 30-year mortgage and begin to embrace alternative mortgage products to make housing more affordable.
Jenni Bonura: The past few years have been marked by a notably tight inventory in the housing market. Transitioning into late 2023, we’ve seen a general uptick in inventory levels, although it’s important to note that some areas still face limitations. Looking ahead to 2024, the expectation is for the market to achieve a more balanced state and in some price points, where we may see a shift from a seller’s to a buyer’s market.
Alongside this, we should also prepare for the return of traditional seasonal market patterns. Interest rates, a pivotal factor, will undoubtedly continue to shape the market; with increases potentially dampening purchasing power and decreases likely to stimulate buyer interest and activity.
Do you think any segments of the residential market will see growth in 2024? (new construction, rural, luxury, etc.)
Huffstickler: There was much trepidation in 2023 in the capital market space, which made getting new construction out of the ground more difficult. I think as buying goes back up, so will the new construction starts.
Jones: Move-up buyers who liked their interest rate did not enter the market like we expected in the spring of 2023. We expect to see some of these buyers return to the market in 2024. These buyers likely had recent life changes like a marriage, a new job or the birth of a new child. We expect to see higher demand for single-family homes and new construction in 2024 as a result.
Bonura: Consistency remains a hallmark of the real estate market cycle: homes that stand out in desirability, condition and pricing will invariably command top market prices and sell quickly. This applies across the board — to new construction, luxury homes, condominiums and more. As we see inventory expand, buyers will benefit from a wider selection of options. It’s important to acknowledge, however, that new construction may continue to face challenges such as labor shortages, rising material costs and expensive capital. Despite these hurdles, an increase in the supply of new homes is anticipated.
What growth, if any, do you expect for your company next year? Do you expect your business to thrive, decline or remain stable? Why?
Bill Murray: We’re looking to end the year with stability and maybe even a little uptick in the fourth quarter. I think the first two quarters of 2024 will tend to be down. Maybe we’ll see a little stability in the third quarter with an uptick in the fourth quarter to start 2025 on a pretty good note.
Jones: We expect to continue to grow in 2024, both in agent count and productivity per agent. In uncertain times, agents need the leadership, coaching, training and tools that we provide as a company, and clients need the guidance of seasoned professionals like RE/MAX Around Atlanta agents. Many newer agents have not faced a market like we see today, but RE/MAX agents and our broker team have the experience and expertise to navigate the challenges.
Golden: As we look ahead to 2024, our company, Berkshire Hathaway HomeServices Georgia Properties, anticipates stability in our business. The real estate market, while facing challenges such as limited housing supply and elevated mortgage rates, continues to demonstrate resilience.
I’m particularly encouraged by the insights provided by Lawrence Yun, the NAR chief economist, who predicts a 2.6% increase in home prices for 2024. This prediction underscores the persistent housing supply issue, which, while challenging, presents opportunities for us to connect buyers and sellers effectively.
Despite the current mortgage rates, the underlying demand for homes remains robust, which has kept prices elevated. With NAR’s expectations of mortgage rates dropping closer to 6% in 2024, we anticipate that this will further fuel demand and maintain price levels. Overall, the combination of these factors leads us to believe that our business will remain stable in the coming year.
Bonura: We forecast the volume of home sales in 2024 to be on par with the figures from 2023, indicating a stable outlook for our business. However, we expect a modest rise in the average sales price, which should contribute to an increase in our year-over-year sales volume if mortgage rates stabilize or decrease. The continued attraction of international and national businesses to the metro Atlanta area positions us well for growth, particularly in our relocation business — a sector where Harry Norman REALTORS® has historically led the market in Atlanta.
Huffstickler: With transitioning consumer sentiments migrating the market back into buying and selling mode, we are optimistic that 2024 will be a stellar year for us. In spite of the external market conditions, our brokerage spent 2023 focused on growth: growth of our brokerages (going from two offices to five offices), growth of our agents (we increased our agent count by 20%) and focused on growing the business of our agents.
What will be the biggest challenges for agents in 2024? How can they overcome these challenges?
Jones: Market cycles are an inevitable part of our business, and the challenges of 2023 will likely continue into 2024. Fundamentals are critical to this business and must be used during market changes. Agents should be laser-focused on staying in touch with their contacts and take time to build their database, which can help them find new listings and keep their business flowing. They should also connect with top-producing agents and learn from them. Education and coaching are also vital to growing a real estate career. Finally, agents must remain tech-savvy and stay on top of the latest trends and tools to remain competitive.
Huffstickler: As the market opens up and buyers start to buy and sellers start to sell (then subsequently buy), agents will still be faced with the challenge of low inventory supply. Atlanta’s growth is still one of the top in the nation, and as our population has continued to grow, the for-sale housing inventory has not grown to meet the demand.
Bonura: As we anticipate the market’s shift from a seller’s to a more balanced or buyer’s market in 2024, agents will help educate clients about the impact of these changes on property values. Precision in pricing becomes more crucial than ever as we guide clients through this transition. Additionally, effective marketing across various channels will be crucial for selling homes. Agents who can market well, use technology effectively and show deep market knowledge and expertise while delivering a first-class service experience will do well, especially when the market is changing.
Experienced and informed agents who understand pricing and negotiation will add more value for their clients. They can also mitigate problems during the buying or selling process with their strong business relationships and networks, leading to a smoother and more efficient experience for everyone involved.
Golden: In the upcoming year, our Berkshire Hathaway HomeServices Georgia Properties sales associates are gearing up to face a series of formidable challenges in the metro Atlanta real estate market. With dwindling inventory, surging home prices and elevated interest rates, both agents and potential buyers and sellers will need to be well educated and informed. Having a solid real estate and lifestyle plan and the ability to comprehend the present market conditions and identify opportunities within the local markets, all under the guidance of a seasoned local expert, will be pivotal in achieving success.
Our agents are experts at guiding buyers to neighborhoods that are within their budget. They stay updated on the latest financing offers and work closely with lenders to secure competitive mortgage rates, ensuring that clients can thrive even in this challenging environment. Our partner, Prosperity Home Mortgage, can offer additional guidance and second opinions to help clients.
The rise of build-to-rent programs introduces both challenges and opportunities for our agents. Staying well-versed in these programs and guiding clients through their unique intricacies empowers our associates to excel.
In 2024, Atlanta’s real estate market will require dedication and adaptability. Staying informed, building robust networks and nurturing relationships within the industry and the community are essential. A proactive approach to seizing opportunities, coupled with unwavering commitment to delivering exceptional service, will be the keys to thriving in this dynamic and competitive real estate landscape.
What do you think needs to happen for the market to improve?
Bonura: There is certainly a correlation between low mortgage rates and increased sales. However, we have seen that homes do sell across a wide range of mortgage rates, both when the rates are in the low single digits as well as the double digits. The challenge is when mortgage rates are constantly changing. The market thrives on stability, and frequent rate changes can lead to uncertainty, prompting buyers to delay their decisions or attempt to time their purchases. For the market to improve, a stable rate environment is essential. Lower mortgage rates would propel this even further,as lower rates tend to stimulate more activity in the housing market.
Jones: Affordability and mortgage rates continue to be top concerns for many buyers. There needs to be zoning changes in many municipalities to allow for more multifamily housing. Would-be sellers who are hesitant to trade a low-interest rate for a higher one should consider that home equity is at an all-time high, in large part due to the rock-bottom interest rates we saw in recent years. Sellers should consider leveraging that equity to bridge the gap in higher mortgage payments until they can refinance into a lower rate. Once rates do drop, we expect to see multiple offer situations, buyers waiving inspections, appraisal contingencies and rising home values.
Golden: It’s evident that lower interest rates are a beacon of hope for those contemplating a move. Many potential sellers have been holding out, reluctant to let go of their current lower interest rates. With the possibility of rates dropping, we can expect more homes to hit the market, providing some relief to the current inventory shortage. To emphasize the point, it’s highly beneficial to undergo a real estate assessment on your property. This will enable you to gauge your equity and purchasing potential in the current market. Numerous homes were bought at low-interest rates and experienced substantial appreciation or were purchased above the listed prices with minimal conditions. Considering this, we advise conducting a strategic evaluation of your purchasing capacity as we transition into a more typical market situation, especially if you’re contemplating selling your current property before acquiring a new one.
Furthermore, government programs and incentives aimed at aiding first-time homebuyers would be a welcome lifeline. These initiatives can make the dream of homeownership more attainable for many, injecting fresh demand into the market.
However, it’s crucial to keep expectations realistic. The challenges we’re facing won’t be resolved overnight. Home prices are likely to keep climbing until the market reaches a balance between supply and demand. While lower interest rates and government support are positive steps, keep in mind the historic average for interest rates hovers around 7.4% so today’s current rates are not that far off.
Huffstickler: Lower interest rates! Our rates climbed to the highest many have seen in many, many years, and we undoubtedly felt the result of this in the housing market.
Murray: It’s a unique experience each time. The mortgage rate is a factor, but it’s not THE factor. When you consider the difference between a 4% and a 7% mortgage, the appreciation you get on that $500,000 house could offset the difference in rates.
I think homes are still going to appreciate, particularly in the hot areas. You hear that the mortgage rate has doubled in the last year, but what you don’t hear is that inventory has also doubled in the last year. We’re not there yet, but at least it’s headed in the right direction.
Will downtown Atlanta finally see the rebirth people have been hoping for?
Murray: I think it’s happening. What you need to do is have the right players in motion. Atlanta brought the Braves here, and they couldn’t revitalize downtown. They brought the Falcons, and they couldn’t revitalize downtown. They brought the Olympics, and they revitalized downtown for a time. They brought Georgia State here and … it’s passed a tipping point, and I think it’s all in a positive direction now.
Huffstickler: I have personally always had a love for downtown Atlanta. The architecture, the infrastructure, the history, the access to public transportation, the proximity to the arts, entertainment and tourist attractions… Downtown Atlanta is ripe for a rebirth, and with so many people seeing this part of our city through the same lenses that I do, I feel certain it will see its day very soon.
Bonura: Atlanta is actively undergoing a revival. The Metro Atlanta Chamber’s 2023 Profile underscores this with evidence of significant population growth and a strong $422 billion GDP economy, supported by major corporate headquarters.The city’s transformation is further fueled by cultural and recreational projects like the Atlanta Beltline, enhancing its livability. With top-tier educational institutions and dynamic entertainment and sports scenes, Atlanta is cultivating a robust, future-focused workforce and a vibrant community. These developments reflect the city’s progressive spirit and resilience. The ongoing rejuvenation of downtown Atlanta is driven by smart investments and a vision for a sustainable, lively urban center. With this renewed focus and investment, there are many positive indicators of a prosperous downtown future.
After years of relatively limited housing inventory, what is the inventory outlook for Atlanta next year?
Murray: I think it’s trending up. They say a stable inventory is six months. We’re a long way from six months. If we can get it up to three-and-one-half to four months, it will be a good, robust market.
Golden: The inventory outlook for Atlanta next year appears to be gradually improving, but it may not offer an immediate solution to the persistent shortage of housing supply. Despite the challenges of limited inventory in recent years, there are several factors at play that could influence the housing market in 2024.
Experts like Lawrence Yun, the NAR chief economist, have predicted a modest 2.6% increase in home prices for the coming year. While this forecast suggests some growth in inventory, it’s important to note that it’s still not a significant surge, and home prices are likely to remain high.
Moreover, lower interest rates, though not yet at historically low levels, are expected to become more accessible. This is an encouraging sign, as it can motivate homeowners who have been holding back from selling due to their current lower interest rates. As they become more comfortable with the idea of giving up these rates, more homes may enter the market.
In summary, while there are positive indications, the inventory outlook for Atlanta in 2024 is likely to be a slow and steady process of recovery rather than a sudden influx of available homes. The housing market should gradually stabilize as supply and demand move toward equilibrium. The future is looking up, and we take great pride in assisting others to realize their American Dream or to help facilitate their next significant move forward.
Huffstickler: Better than 2023, but nowhere near where we need it to be to fit our demand.
Bonura: Atlanta’s housing inventory, which has been tight, is starting to increase and is expected to balance out in 2024. Some areas may shift from a seller’s to a buyer’s market, with seasonal trends re-emerging.Interest rates will continue to play a crucial role in shaping buyer behavior and market dynamics.
Jones: According to the RE/MAX National Housing Report, the months’ supply of inventory in Greater Atlanta increased each month throughout 2023, year-over-year. However, it remains historically low, as a six-month supply is considered a balanced market. Based on our most recent data, Greater Atlanta sits below a three-month supply, and we expect this trend to continue, with inventory up slightly but still at a level that makes that market competitive for buyers.