Recent predictions for the Atlanta real estate market suggest that home prices in the area could rise much more slowly through the end of 2018 and into 2019.
One group of researchers predicted that the median home value in Atlanta would rise by 3.7% over the next year or so, compared to a gain of 13.8% over the previous 12 months. That would be quite a slowdown, in terms of annual appreciation.
The median was at $239,600 as of June 2018.
Predictions for Atlanta Real Estate Market: 2018 – 2019
In June 2018, the economists and analysts at Zillow offered an updated prediction for the Atlanta real estate market in 2018 and 2019. They forecast that the median house value would climb by 3.7% over the next 12 months. This prediction was issued in June, which means it extends into early summer of 2019.
“Atlanta home values have gone up 13.8% over the past year and Zillow predicts they will rise 3.7% within the next year,” the company stated.
To put those numbers into perspective:
If you look back over the last few decades, house prices in the U.S. have risen by an average of around 4% or 5% per year. The double-digit gains we’ve seen in some cities over the last few years are an anomaly, and much higher than average.
This means that the real estate market prediction for Atlanta over the next 12 months is much closer to historical norms. While the larger gain recorded over the last 12 months was unusual by historical standards. So maybe the Atlanta real estate market is getting back to the old “normal,” in terms of annual price appreciation.
The company also called it a “neutral” market, which means it is in between a buyers’ and a sellers’ market. Perhaps that’s one of the reasons why their prediction for the Atlanta real estate market is so much lower than the previous year’s gains.
Supply Is Still Running a Bit Low
Housing supply within the Atlanta area is still a bit lower than usual. This is a trend that’s affecting most of the country right now, and it’s putting upward pressure on home prices.
According to the latest MLS data and real estate reports, the city had a 2.9-month supply of homes for sale. That was on par with the national average, but lower than what is considered a “balanced” market.
Given the inventory situation in the area, it would seem that the Atlanta real estate market is still leaning more toward sellers rather than buyers. It’s not a strong seller’s market, like the ones we are seeing in the Pacific Northwest and parts of California. But in a typical real estate transaction in Atlanta, sellers still have more negotiating leverage.
Over the coming years, we expect inventory levels to rise in many cities across the country. If this occurs, some real estate markets could swing from favoring sellers to buyers. But that has yet to happen, for the most part.
In April 2018, homes for sale in the Atlanta area spent a median of 21 days on the market before going under contract. That number is a bit lower than the national average, which points to a fairly active real estate market with steady demand from buyers.
Population Growth Brings More Buyers Into the Picture
Population growth has increased demand for housing in Atlanta, on both the rental and purchase side. This could be another factor that will drive future real estate trends.
According to a report by the U.S. Census Bureau, published earlier this year, the Atlanta metro area gained nearly 90,000 new residents from 2016 to 2017. That was the third-largest population increase for that period, among the nation’s largest metropolitan areas.
According to Mike Alexander of the Atlanta Regional Commission:
“This is a place that is attractive for people to move to especially for work our employment growth here in metro Atlanta has been exceptional over the last five years coming out of the recession we have been outpacing the United States consistently for the lat four years.”
New-home construction has increased markedly across the metro area, in response to higher demand from buyers. And that could be another reason why Zillow’s forecast for the Atlanta real estate market calls for more modest price gains in the months ahead.
In some cities and metro areas across the country, there are more severe inventory shortages occurring. So home prices in those areas will likely rise faster through 2018 and into 2019. The supply situation in Atlanta isn’t as bad, and there’s quite a bit of residential construction taking place as of summer 2018. So this might be one of those markets that becomes more “balanced” in 2019.
Disclaimer: This article contains predictions for the Atlanta real estate market projecting through summer of 2019. These and other “forward-looking” statements were made by third parties outside of our company. The publishers of the website make no claims or assertions about future real estate conditions.