Happy February Everyone! We begin the February 2023 real estate market update for the Top 7 North Atlanta Suburbs with a confession: Claire and I are not journalists. It is our job to assemble the most reliable data available, put it together into a logical narrative, and summarize the state of the North Atlanta real estate market for our clients who trust us to do so. This month, however, we were privileged to see and meet National Association of Realtors Chief Economist, Dr. Lawrence Yun, when he spoke to the Atlanta Association of Realtors. One speaker made the comment that you know you’re a real estate geek when you get excited about a lecture by an economist. I guess that’s us then! We did not get his autograph, but we did get a selfie!!
So what did Dr. Yun say? Dr. Yun is bullish on the residential Atlanta market. It is the number one market to watch in the country as all the economic indicators here are strong.
But Dr. Yun is bearish on the rental market in Atlanta. In his opinion, there has been so much apartment construction over the last few years that supply is now out-pacing demand.
“In the upcoming years, the rent world may not be as strong because apartment construction is so active. There will be many new empty units hitting the market steadily later this year and going into next year… Apartment rent growth, which has been super strong in the past two years, will steadily be minimized with rent growth of only about 4% this year and I would not be surprised if rent growth becomes zero next year.”
Dr L. Yun 2-16-23 Atlanta GA
Back to the residential market, Dr. Yun feels so strongly about the strength of the Atlanta market that the National Association of Realtors published this article in December: 10 Housing Markets Expected to Lead the Nation in 2023.
In this article, author, Melissa Dittmann Tracey, says, “The city, dubbed the “New York of the South,” rose to the top of NAR’s list of markets to watch in 2023 for three main reasons: Atlanta has greater housing affordability than comparable cities, its population is growing more rapidly and 20% of renters there can afford to buy a median-priced home—higher than the national average.” She goes on to say that Atlanta also boasts a robust and growing job market, where many major technology companies, such as Apple, Microsoft and Visa, are relocating from the West Coast.
Dr. Yun summarized the current real estate market in three points: Misleading headlines, mortgage rates, and inventory! The biggest of the top three stories is the misleading headlines you see everywhere suggesting there will be a market crash!
When I googled “Will there be a market crash in 2023,” there were over 500 million results! That’s probably why 67% of Americans believes there will be one.
Here’s the dirty little secret! Almost every one of those articles concludes there will be NO market crash the likes of 2008. Why? Let’s take a look!
The 2008 Crash was characterized by job cuts, subprime loans, excessively high inventory, mortgage delinquencies, and foreclosures.
Conversely, today’s market is characterized by VERY low unemployment, tight lending standards, historically LOW inventory, minimal delinquencies and foreclosures. It is the opposite of the 2008 Crash!
And what words are the opposite of crash? Fix! Blast off! Build! Construct! Ascend! These are all positive constructive words which, when applied to an economy, create a wealth-building opportunity, as long as you can focus on the data. Everything is going to be ok.
Now for interest rates! Interest rates are trending down.
This is good news for buyers and sellers alike. Ever since November 10th when rates hit their high at just over 7%, they have been declining and are expected to continue to do so. Here is a colorful chart that demonstrates the EFFECT interest rates have demand in the market. 7 to 7.5 percent creates weak buyer demand, 6.5% to 7% creates limited buyer demand, 6% to 6.5% creates good buyer demand, and 5.5% to 6% creates strong buyer demand. This is a chart you can continue to come back to as rates rise and fall. If you are a buyer, it helps you to know what competition to expect. If you’re a seller, it gives you a more realistic expectation of how many buyers are out there so that you know how aggressively to price your home.
Now for inventory. National inventory is down.
But inventory is UP in all 7 Top North Atlanta suburbs!
Note the red line connecting January supply for the last three years. Also note that January is the lowest inventory month of every year so you can expect inventory to shoot up in the coming months.
In all of Atlanta, we still only have a two-month supply of inventory – six months is a balanced market. But two months is better than two weeks, which was the case last year. All in all, we can expect a more balanced real estate market in 2023 compared to 2022. Buyers and sellers alike should expect a return to pre-pandemic business as usual.
Now that we’ve covered the national and local market overview, let’s drill down into each of our Top 7 local markets starting with Milton.
Milton’s average price increased 17% year-over-year from $1.2 million to $1.4 million for the 8 homes that sold in January 2023. That is half the number of homes that sold last January. I suppose the lack of demand accounts for homes selling for only 92% of list price compared with 102% last year. Days on Market were 60 which was 32 more than last year. February began with 66 active listings, 11 more than last year. So supply is increasing. But rumors of multiple offers are slowly starting to circulate as the first buds of spring appear. Surely we won’t relive last year’s competition to find housing though!
The average price at Lake Lanier was up by 19% year-over-year to $1 million dollars for the 10 homes that were sold in 99 average days on market. By comparison, January 2022 saw 33 homes sold. February began with 69 active listings compared with only 51 last year. Buyers paid only 91% of list price. Always keep in mind that these stats only cover lake homes with docks. Both Milton and Lake Lanier had the largest gap in list price to sold price, which makes sense because they are the two most expensive markets in our report. However, the weather has a direct impact on home sales at Lake Lanier so expect to see more activity and increased prices as we warm up.
The average price of $687,000 dollars in Roswell was up by 19% year-over-year. The 36 homes sold for 96% of list price compared with 100% in January 2022 and they sold in 38 average days, about the same as last year. Active listings at the beginning of February were 80 as opposed to a piddly 29 in 2022. That’s a 36% increase in supply!
For the 30 houses that sold in Suwanee in January, the year-over-year average price increased 18% to $636 thousand dollars. Average Days on Market increased by 22 to 50. Houses sold for an average of 93% of list price compared to 102% last year. February began with 73 active listings, 14 greater than last year.
In Johns Creek, the average year-over-year price was up by 20% to $820 thousand dollars in January. The 28 homes sold for 97% of list price compared with 100% last January. Days on Market were up by 24 year-over-year to 47. February began with 30 active listings compared with 25 last year.
Alpharetta’s average price for January 2023 was down 3% to $693 thousand dollars. Alpharetta is the only Top 7 suburb with negative value year-over-year. The 39 homes that were sold stayed on the market an average of 38 days which is 13 more days than last January. Buyers paid 95% of list price compared to 101% last year. Supply, that is, active listings, increased from 87 last February to 127 this year.
Lastly, the average price in Cumming increased by 1% from last year landing at $536 thousand dollars. The number of homes sold was down year-over-year by 88 to 107. Average Days on Market increased from last year by 31 to 54. Buyers paid 95% of list price compared with 101% in 2022. February began with 230 active listings, 108 more than last year.
In the Top 7 North Atlanta suburbs, everything is going to be all right! Interest rates are trending downward, inventory is trending upward, and now you have the data that will inoculate you against the fear of click-bait headlines. We are heading into a strong spring market where many will decide it is time to make a move. If that is you, we are here to help!
Claire and I would love to come take a look at your home to give you an idea of how much you could expect to make and what you need to do to maximize your net! Even if you are just thinking about it and are not sure of your next step, give us a call. We love to provide our clients with essential data so they can make informed decisions.
If you are ready to buy in 2023, give us a call so we can sit down and discuss your particular situation. We can save you time, money, and headaches. Plus, we have a lender that offers free refinancing in the first 3 years of your mortgage which is a great opportunity in today’s market.
You can email us at McCownGroup@ansleyre.com or find us on Facebook and Instagram at The Best of North Atlanta or visit our website at McCownGroup.com. Of course, you can go old school and call (or text) us at 678-807-9566. We look forward to speaking with you soon!