Active listings in the Atlanta metro saw modest growth during December, but the number of homes under contract dropped 24.6% compared to the same month last year, according to data from Georgia MLS.

Homes under contract, or pending sales, were down on a monthly basis as well, tumbling 8.1% from 3,542 in November to 3,245 last month. So, what’s driving this rapid drop? A perfect storm, according to Georgia MLS Chief Marketing Officer John Ryan.

“This decline can be attributed to a couple factors,” Ryan told Atlanta Agent Magazine. “Housing activity traditionally slows in the fall and winter months as buyers and sellers wait for better weather, school year timing and enjoying the holiday season. Winter slowdown generally reduces contract activity.

“While seasonality plays a role, a bigger factor is the increase in available inventory for prospective buyers. More choices allow buyers to take more time and delay purchase decisions, a factor which was not afforded them during the pandemic years. The shift toward a more balanced market has reduced buyers’ sense of urgency, as they no longer feel pressured to make rapid offers to avoid missing out, unlike in prior years of tight inventory.”

Contract cancellations may also play a role, Ryan noted.

“A final data point that we have been monitoring is the rate of contract cancellations,” he said. “These are listings that went under contract, then were either withdrawn from the system or placed back on market. Of the listings that went under contract in December, 16.7% had a change of withdrawn or back on market. Contracts falling through before closings can be attributed to financing issues, underwriting guidelines or buyers backing out after home inspections.”

Active listings saw yearly growth of 9.7% during December, and new listings fell 7.8%. The median home sales price stayed relatively stable, falling 2.5% to $390,000. Around 4,531 units sold in December, marking a 0.5% decrease from the year before.