Looking at the Atlanta real estate market, planning to buy or sell a home, you may be wondering. what is going on here? Rising interest rates are finally putting the brakes on the frenzy, more than a typical late-summer slowdown, after a two-year pandemic boom that stumbled homebuyers to water the pockets of sellers. It seems that homes are on the market longer, they don’t feel understocked anymore, and buyers are less likely to sign their first child to win the bidding war. Now you are far less likely to run into a bidding war. (Redfin’s latest report shows “old” inventory (homes on the market for more than 30 days) increased year-over-year for the first time since the pandemic began.) If so, what does a slowing climate mean for you?
“‘Slowdown’ is relative,” says Anna Kilinski, CEO of Anna K Intown/Keller Williams Intown. “I would describe it as ‘coming back to earth,'” she says. We’re moving out of a market that didn’t make sense on paper and into a normal market. No one should be afraid of it. “
We note that five agents across town (notably, interested in seeing homes continue to be bought and sold) for perspectives on navigating this changing housing environment. please). Here’s the gist:
Competition is dwindling. Buyers may finally be able to breathe a sigh of relief.
The blisteringly hot housing environment of the past two years has combined cheap cash (low interest rates), high sentiment (pandemic stress), and housing shortages (such as slow construction). Prices skyrocketed, and according to one widely cited study, Atlanta became one of the most expensive and overpriced markets in the country. But buyers were still vying to beat out offers on highly flexible terms that sellers called every shot. I called. With interest rates rising and the pace calming, buyers may have more time to think carefully about the biggest purchase of their lives.
Kam Williams, broker and owner of Kam Williams Realty Group, said: No more,” she says. “Now buyers are a little more at ease. If they see something, the next she doesn’t have to run out in two seconds. They can go to open houses over the weekend. They feel so much pressure.” Is not.”
Competition at the peak of the market has spurred overpaying, too many compromises, and hasty decisions to forgo too many terms found in typical contracts.
“People were giving up on everything,” says Kilinski.
Agents we spoke to recommend leaving contingencies subject to inspection and evaluation. Here are some smarter suggestions in case buyers find themselves in a competitive situation. Brendan Wright of Atlanta Fine Homes Sotheby’s International Realty said: Here are his recommendations: ask for a shorter due diligence period (he pushes his 5 days), pay a hefty deposit (if you land the house, you’ll get it back), the seller provides temporary residence to the owner free of charge. (often 60 days). These concessions should be enough to sweeten the deal as needed in this new environment.
But rising interest rates mean there is a new affordability cap.
Basically: Your monthly payment will be higher, so unless you’re buying with cash, you’re not on a big budget. The difference buyers once may have paid to land a home could now be sucked up at higher rates. will find it most difficult, and rents are skyrocketing.
Chad Polazzo of Re/Max Metro Atlanta Cityside said: “But that means it’s working. It’s getting the intended effect. It’s going to slow things down, that’s the intent.”
Ideally, a rate hike would result in a more stable and more representative market. Indeed, inflation slowed last month.
“At these rates, a lot of people are very focused on risk management right now,” says Polazzo, who specializes in the intown neighborhoods on the east side. Buyers may be presented with prices for dream homes that until recently were within their budgets, prompting them to buy smaller homes or other neighborhoods.
Inventory is increasing little by little.
A recent Redfin report found that Atlanta’s year-over-year change in homes that have been on the market for 30 days or more (so-called “older” properties) increased 12.8%. This newfound relative abundance of offerings gives buyers more choice and a foothold in what has recently been a very strong seller’s market.
However, new construction is still lagging behind.
“There are still challenges due to supply chain issues,” says Polazzo. “Builders are still struggling some, and that’s impacting inventory.”
However, in general, the longer a home has been on the market, the more options buyers have. Price drop again. Consider asking your agent to search for homes that have recently dropped in value, Kirinski said. This, it says, “shows motivation.”
But high prices are still the norm, and hot areas are still hopping.
Homebuyers may be disappointed to hear that Atlanta’s home prices haven’t seen much of a decline so far, given the extremely high interest rates that have reached their peak.
“I don’t think the listing price is going down. It’s stable,” Williams said. “We could be stuck on these for a minute.”
However, some experts have suggested that prices may fall as inventories continue to build, suggesting that there could be some kind of correction going forward, or at least a slowdown in price growth. “Housing price growth is expected to slow,” said Daniel Hale, chief economist at .com. “Every dollar costs that much. People are paying him 50 percent more than they were at this time last year. Prices will slow down and return to normal,” he said.
Price growth is likely to slow down, but prices themselves may be less volatile, especially in the most competitive regions.
“I work mostly in-town in Atlanta. If it’s a great product at a good price, there’s usually multiple offers,” says Compass’s Kyle Jackson. Demand for homes in these areas, especially those under $1 million, is still high, according to multiple agents, including Inman Park, Candler Park, Ansley Park and Morningside. It’s also those areas where out-of-state buyers still show a lot of interest (according to Hale’s data from Realtor.com, more than a third of his Fulton County buyers are from out-of-state). come from New York and California). , Atlanta prices are safe). Things may move slower in other regions and at higher price points.
“I think we’re going to see some things in the $2-3 million range that are stagnating, like Buckhead,” says Kilinski. For some high-end buyers, this may be a signal of opportunity.
Sellers will have to adjust their expectations and may have to work hard to get their home ready to list.
While many areas are still doing very well for sellers, others are moving toward a buyer’s market and sellers may need to go all out for it.
“Many sellers still feel like they don’t have to do anything, but now buyers have more options,” says Kilinski. “Don’t forget to prepare the house. You are in the contest. Competitive price.”
In addition to any major necessary repairs that may come up on inspection, Jackson suggests a few relatively simple things sellers can do to maximize their success. “Don’t get caught up in the weeds of the little things,” he says.
Polazzo adds: They don’t want to deal with supply chain issues and inflation to build a house. “
A seller may have been listed for the same price as a nearby seller for the past year, but not much higher. This means that buyers don’t have to worry as much about appraisals of properties they are offering. This means that some buyers are not ready to do so. In addition, sellers are willing to make terms attractive.
“There are no ratings gaps that we were seeing,” says Williams. “Sellers are a little more considerate of their concessions. When it comes to inspections and closing costs, we’re noticing that big times are changing.”
Kilinski emphasizes that the gap between list price and selling price is closing. If she puts the price at $750,000, it’s $850,000,” she says. “No more. Even now, if she puts the price at $750,000, it’s $750,000. So we need to readjust our expectations.”
“Previously, if there were no offers after the first weekend, the price was wrong,” continues Kilinski, who encourages sellers to review all offers. “Well, if you don’t have an offer after the first weekend, leave it alone.”
Even in the hottest regions, Wright said: Or — “Maybe I see 5 offers instead of 10.”
“Sellers have to be more patient now,” adds Williams.
Are there any new benefits for sellers?
“If there are buyers in this market, they are serious buyers,” says Kilinski. “They don’t just look at what’s out there, like people have been doing for a while.” may be an opportunity for “If you’re downsizing because your kids are going to college or whatever, it might be time to leverage equity. A year from now she might be out of control,” she said. say. “It’s asset preservation.” It’s also a time of year for cash offers that sellers appreciate.
Don’t try to match the timing of your home purchase or sale with the price. Plan your local financing and know that refinancing is an option for the future.
“There’s a reason they say you’d date a rate and marry a house,” says Kirinski. When you find it, you’ll say ‘I wish I had’ Don’t wait for interest rates to go down Prices are unlikely to go down More likely rates will go up 1-2% And as for concerns about a repeat of the 2008 crash, experts and economists agree it’s not a pressing issue.
“I don’t think we’re going to go backwards,” says Kilinski. “If you buy now and he’s thinking of using it for seven years, no doubt. If you sell it in three years, you might ask, ‘Will I get my money back?’
Either way, the type of loan you get matters.
“The advice I give buyers is that you should hop on the train whenever you can,” says Williams. “Ultimately, you need to have a relationship with a lender who will be creative when it comes to financing, so you need the right real estate agent, broker, or agent.”
Local funding and valuation are important. “I would like to ask the buyer to How confident are you in your lender?‘ says Polazzo. “One of the worst things that can happen is an unknown lender.”
The agent we spoke with recommended considering an alternative financing strategy: Adjustable Rate Home Loans (ARMs), which are offered at a low interest rate for a set number of years (near (especially useful if you plan to sell in the future), buy down interest rates, or put in less than the assumed 20%.
“You can own a home for as little as 3-5% down,” says Kilinski. “A lot of people don’t understand that.”
Kilinski also suggests a two-for-one buydown. In this case, the buyer can receive the lower payment for two years before increasing to the normal rate. This is “ideal for those who may be getting raises every year or who expect to earn more in the future.”
You can also refinance if interest rates go down.
“A lot of buyers are kicking themselves because they weren’t in a position to buy when rates were low,” Williams says. I think it is possible to lower the