The new year is in full swing and so is the 2023 Housing Market. While we experienced a slow down in the fourth quarter due to ongoing inflation concerns, rising interest rates, and the typical pullback during the holidays, we are starting to see Buyers return to the Market. I'm continuing to get alot of questions around where the market stands, home values, and thoughts on how the Atlanta Market will fair in 2023. The most important thing I have been reminding folks about is not to listen to the National News when it comes to the housing market. Why is that?
Every city is different, and therefore every housing market is different. Housing sales tend to follow unemployment stats. The lower the unemployment, the better the housing market. At around 3.1%, Atlanta continues to trend below the current national unemployment average of 3.5%. Recently, WalletHub ranked Atlanta in the top 15% of the best cities for jobs based on job opportunities, employment growth, average starting salary, job satisfaction, and job security.
Now, couple that lower unemployment rate with a low listing inventory, a balanced market is 4.1 months and Atlanta is still at just over 2 months, and we continue to have a VERY strong local housing market. Yes, home prices have decreased, on average, 3% to 5% from their peak at 10% appreciation in Q2 of 2022. However, we are just "normalizing" and returning to our historic appreciation average of 4%-6% annually. To align with this new norm, we saw nearly 53% of listed homes receive at least one price reduction in Q4 2022 to] adjust to the changing market and Buyer tolerance.
Even with those price reductions, Sellers are still making a favorable profit on their home. For example, a home recently sold in a local neighborhood for 90% of its original list price after spending 59 Days on Market and two price drops. The Sellers had only been in the home about 18 months when they decided to sell but, despite the price drops, they still made a sizable gross profit over what they paid. In late January, a similar home listed right at $1M and, after only 2 Days on Market, is pending. So, what is this telling us?
After months of sticker shock, the Buyers are starting to become more comfortable with the higher interest rates and normalizing home prices which means it is still a great time to sell your home. In some cases, we are seeing the return of multiple offers again as Buyers compete for the best homes.
