Can you believe we are halfway through 2023? This Market Update focuses on the normal rhythm of the real estate market. As the saying goes, “An ounce of prevention is worth a pound of cure?” This is our contribution to an ounce of prevention.
Prevention of what? Fear! There has been so much fear mongering regarding experts’ forecasts of the “coming market crash” that we want to give you the facts of both the local and national markets to prevent you from missing out on the amazing real estate market in North Atlanta Georgia in June 2023!!
The experts themselves now realize how off they were. At the beginning of 2023, Tom Ferry interviewed Patrick Bet David of Valuetainment along with David Childers of Keeping Current Matters (KCM), a real estate research firm to which we subscribe. Patrick Bet David made an emotional/fearful prediction that home values would fall 15-20% in 2023!! David Childers immediate responded with a more level-headed worst-case scenario of maybe 5%. was quick to correct and to give the evidence for his opinion.
Patrick was not alone!! There was a tidal wave of negative news out there predicting nothing short of a market crash the likes of 2008! Those negative stories had, and continue to have, a terrible effect on the market.
Fannie Mae surveys consumers every December to see if they expect prices to go down over the next 12 months.
From 2010 to 2021, consumer confidence remains pretty steady. Suddenly in 2022, the number of Americans who expect prices to fall doubles!! And no wonder!! The media was blasting them with the same negative message continuously!!
This fear has real-life consequences. We have clients who were so convinced prices would fall that they chose to step out of the market and wait. They were financially hurt by waiting because prices have now risen so much that their money buys significantly less house.
In the end, David Childers was right!! He had the evidence on his side and bet on the evidence rather than the emotion of the market. What evidence? Statistics like…
67.6% of Americans have either completely paid off their mortgages or have at least 50% equity in their homes. If those homeowners experience any financial challenge, they have options. The average equity is $300,000. That’s a helluva nest egg!
Statistics like inventory has remained at historic lows that cannot keep up with demand. This is the opposite of 2008 when there was an 18-month supply of inventory when the financial crisis hit which brought demand to a standstill.
These are facts! Facts aren’t sexy, but they ARE profitable if you can navigate through the emotion.
Let’s talk about the rhythm of the market now. Home values and the number of homes sold rise and fall every year in a predictable pattern. Check out this chart showing the rise and fall of home sales through the years!
It looks like a heartbeat and it is, in fact, the lifeblood of our market. Real estate follows a pattern. Let’s zoom in on our Atlanta heartbeat.
Notice the volume of homes sold starts low every January and increases to its peak in June or July. Then it falls for the second half of the year, with little hiccups here and there, until it reaches its low in December. Rinse and Repeat!
The chart below shows Atlanta prices rising and falling from 2020 to 2023. Prices follow the yearly heartbeat rhythm too, but the low that prices hit in December is usually higher than the low way back in January, and so home values appreciate on a wavy ascending line throughout the years.
This is why Real Estate has been voted the best long-term investment for 11 straight years!! Better than gold and better than stocks!
It is also why homeownership remains an important part of the American Dream. 78% of Americans associate homeownership with the American Dream!
This is still true for Millennials and Gen Z!!
But knowing the facts is important for those wishing to jump into homeownership! It’s important not to be swayed by inaccurate news reports screaming the sky is falling! It is not!
Why then do we keep hearing and reading articles focusing on fearful statistics? Because we are cycling stats from two of the hottest years in the history of real estate!
Steve Harney, with KCM, coined the term “Unicorn Years” to describe the anomaly years of 2020-2022. This terms allows for a proper discussion of the weirdness of those years
Are you worried because home price appreciation is down 13% in 2023?
Oh wait!! You’re comparing them to the Unicorn Years!! Normal annual appreciation sits right around 5%. We’re returning to normal!
Are you worried that pending listings are way down in 2023? Are you fearful of what that may portend?
Oh wait! You’re comparing them to the Unicorn Years!! Pending listings have returned to normal. That’s all!
Are you worried that Days on Market are way up? Is the market coming to a screeching halt? No!!
You’re comparing to the Unicorn Years! Days on Market have not even returned to pre-Unicorn Years levels.
Are you worried that foreclosures have increased dramatically?
Oh wait! You’re comparing to the Unicorn Years. Foreclosures also have not even returned to pre-Unicorn Years levels and remain at historic lows!
The Unicorn Years changed how we use our homes. We used to eat dinner, watch TV, and prepare for the next day at home. But the day itself was spent elsewhere. Suddenly, dinner, breakfast, and lunch, plus work and school, were all happening at home. The function no longer matched the form, and thousands felt the need to buy a home which met their new needs.
That migration has settled down and we are now returning to normal. But we are cycling large numbers so expect the “experts” to continue to scare you. Just remember they are citing statistics from the Unicorn Years!
In Atlanta, we continue to suffer from not having enough inventory. We need homeowners who want to sell their homes! There are buyers waiting impatiently on the sidelines!! The lack of inventory has made real estate a rather expensive game of Musical Chairs. There simply are not enough chairs for everyone to take a seat.
We hope this article will motivate a few sellers to take advantage of this robust market! Just give us a call, text, or email, and we can discuss next steps. Need more motivation? Then let’s dive into our Top 7 North Atlanta Suburbs to see what is happening in each micro-market, starting with Milton!
The average sales price in Milton GA was $1.2 million, exactly the same as last May. There were 20 fewer homes sold in May 2023 for a total of 25. Those homes sold for an average of 96% of list price as opposed to 106% last year. Days on Market increased from 31 to 41. June began with 10 fewer active listings for a total of 74. If there are 74 active listings and 25 homes were sold last month, this means that there are 3 months of inventory in Milton. Remember six months is a balanced market where buyer and seller have equal negotiating power.
The average price at Lake Lanier was 18% higher year-over-year at $1.3 million dollars for the 28 homes that were sold in 57 average Days on Market compared with 26 in 2022. Always keep in mind that these stats only cover lake homes WITH docks. June began with 104 active listings and buyers paid 93% of list price as opposed to 98% last year. This tells us that even though prices are rising, sellers are overpricing the market by an average of 5%.
The average price of $699,000 dollars in Roswell was down slightly by 2% year-over-year for the 98 homes sold for 101% of list price compared with 106% in 2022. Days on Market were up from 10 to 21 and active listings at the beginning of June were 108, down by 38. As we said last month, the Roswell real estate market continues to be highly competitive, which explains the 101% sales-price-to-list-price ratio.
In Suwanee, 70 houses sold in May (as opposed to 111 last year) and the year-over-year average price increased 3% to $749,000. Average Days on Market went from 8 to 20. Houses sold for an average of 101% of list price compared to 108% last year. June began with 76 fewer listings for a total of 98. Home values in the 2022 Suwanee market hit historic records. The fact that the May 2023 average price still increased by 3% year over year speaks to the strength of this local market.
In Johns Creek, the average year-over-year price was up by 2% to $846,000 for the 36 homes sold, about half as many as last year’s 73. Those homes sold for an average of 101% of list price compared with a whopping 108% last May. Days on Market were up from 9 to 32. June began with 40 active listings compared with 102 in 2022. With 36 homes sold and only 40 active listings, Johns Creek maintains a robust sellers’ market of just over a one-month supply of inventory!
Alpharetta’s average price for May 2023 was up 26% to $994,000 for the 139 homes that were sold. Average Days on Market were up from 11 to 17 and Buyers paid 102% of list price compared to 107% last year. Supply, that is, active listings, decreased from 224 to 157.
The average price in Cumming decreased by 4% from last year landing at $619,000. The number of homes sold was down year-over-year by 122 to 215. Average Days on Market increased from 10 to 25. Buyers paid 99% of list price compared with 112% in 2022. June’s active listings were down by 174 to 230.
KCM says in their June 8th article entitled This Real Estate Market Is the Strongest of Our Lifetime,
The bottom line? We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.
Remember when buyers complained about the multiple offers during those Unicorn Years? The market is finally returning to a healthy normal! We believe it’s still going up even accounting for the normal rhythm (heartbeat) of the yearly cycle.
No matter the economic factors, life’s circumstances sometimes determine that you must make a move. If that is you, we are here to help! If you want to explore selling your home, give us a call. We love to provide our clients with essential data so they can make informed decisions and, in the end, get the highest market price in the least time.
If you are ready to buy in 2023, don’t go it alone! Click here to schedule a call so we can discuss your particular situation and goals. With our proven strategies, we’re confident we can save you time, money, and headaches.
You can find us on Facebook and Instagram at The Best of North Atlanta or visit our website at mccowngroup.com. Or call (or text) us at 678-807-9566. We look forward to speaking with you!