What’s the forecast for the Atlanta, Georgia real estate market in 2021? Will it be a good time to buy a home in the Atlanta metro area? Will home prices keep rising in 2021, as they did last year? And what should home buyers know before entering the Atlanta real estate market?
These are some of the most frequently asked questions among home buyers. Below, we have addressed all of these topics in detail. Here is the current outlook and forecast for the Atlanta housing market in 2021 and into 2022.
Atlanta Housing Market Forecast 2021
The first thing home buyers should know is that home prices in the area will most likely continue to rise through 2021 and into early 2022. (Beyond that is anyone’s guess.) This forecast for the Atlanta real estate market is based on current trends, as well as events that have occurred in recent years.
The supply and demand situation across the Atlanta metro area real estate market can be summed up with a single word. Imbalance.
As of early 2021, there was plenty of demand among home buyers in the Atlanta–Sandy Springs–Alpharetta metropolitan area, but not enough homes listed for sale. In fact, the total number of active real estate listings has declined significantly over the past year or so.
As a result of these trends, recent forecasts for the Atlanta, Georgia housing market predict that prices will continue to climb at a steady and significant pace over the coming months.
In February 2021, housing analysts from Zillow predicted that the median home value in the area would rise by around 10% of the next 12 months. Home prices in the area rose by nearly that much of the previous year, according to Zillow.
In February, team Zillow wrote:
“Atlanta-Sandy Springs-Roswell Metro home values have gone up 9.7% over the past year and Zillow predicts they will rise 10.1% in the next year.”
We mentioned the lopsided supply-and-demand situation and how it is producing strong forecasts for this housing market in 2021. Let’s take a closer look at those conditions, starting with the inventory situation.
Fewer Homes for Sale in 2021
Are you planning to buy a home in the Atlanta area sometime during 2021? If so, you’ll want to be prepared for competition. Currently, the number of homes listed for sale falls well below the demand from buyers.
In February, Realtor.com published a report that showed how the number of real estate listings had changed over the past year. Their report covered 50 of the nation’s largest metro areas. Based on their research, the Atlanta real estate market has experienced a significant decline in the number of homes for sale.
According to the Realtor.com research team, the total number of active listings in the Atlanta-Sandy Springs metro area dropped by -52% from January 2020 through January 2021.
In other words, housing supply declined by more than half in only 12 months.
As a result, home buyers who are planning to enter the Atlanta real estate market in 2021 will have to work harder to find a home that meets their needs and falls within their price range.
Inventory declines were especially steep at the lower end of the price spectrum, for so-called “starter homes.” This is where most first-time buyers tend to shop. So, from an inventory standpoint, 2021 could be a tough time for first-time home buyers in the Atlanta real estate market.
So that’s one side of the real estate market forecast for Atlanta, Georgia. Tight supply conditions are making this market more competitive and putting upward pressure on home prices. But there’s another sider to the equation as well — demand.
Demand Fueled by Low Rates, Population Growth
Throughout 2020, the Atlanta real estate market was marked by steady demand from home buyers seeking to purchase. That’s astonishing, when you consider the fact that we were enduring a pandemic and economic slowdown for most of last year.
Clearly, the public-health crisis has had very little impact on the Atlanta real estate market. Forecasts and predictions for the rest of 2021 and into 2022 suggests more of the same. In a word, resilience.
Let’s take a closer look at housing demand within the Atlanta area, and why it was so strong over the past year or so.
Atlanta has grown significantly over the past decade. According to the U.S. Census Bureau, the city’s population grew by a whopping 18.7% from 2010 to 2019. That’s roughly triple the nation’s growth rate (6.3%) during that same nine-year stretch.
This is partly why Atlanta housing market predictions suggest rising prices through 2021. There are a lot of buyers in the market, and they’re highly motivated to buy thanks to today’s super-low mortgage rates.
In January, the government-sponsored mortgage buyer Freddie Mac published a detailed population study that showed how growth is affecting housing markets across the country. According to their report, the Atlanta metro area was ranked #4 for population growth (when measured by the total number of new residents.)
The image below comes from the above-mentioned Freddie Mac report.
When you add in the tight inventory conditions mentioned earlier, it’s easy to see why the Atlanta housing market has received positive forecasts for 2021 and into 2022.
It’s a textbook supply-and-demand imbalance. Steady population growth, low mortgage rates, and other factors have boosted demand among home buyers across the Atlanta metro area. And this comes at a time when real estate market inventory is declining.
Plenty of buyers … not enough supply. Above all else, this is what’s driving the Atlanta real estate market predictions for 2021 and beyond.
Survey: Atlanta Will Outperform the Nation In 2021
Last month, Zillow published the results of a survey sent out to more than 100 economists and real estate experts. Among other things, survey participants were asked which metro areas they believe will outperform the nation this year, in terms of home-price growth.
Out of the nation’s largest metro areas, Atlanta came in at #7 on that list. More than half of the respondents said that the Atlanta real estate market would outperform the national average in 2021. This is not surprising, when you consider all of the conditions outlined previously.
To quote the January 2021 Zillow report:
“An improved economic outlook thanks to COVID-19 vaccine roll-outs and better treatments was pegged as the most likely tailwind for the housing market in 2021, followed by sustained strength in first-time home buying among Millennials. It proved a powerful demand driver in 2020 and is expected to persist for years to come.”
The Atlanta metro area has experienced above-average population growth in recent years. And low mortgage rates are enticing buyers into the market. Meanwhile, housing market inventory levels remain well below historical norms. All of this puts upward pressure on home prices, and that will probably continue for the foreseeable future.
Out Top-Three Tips for Home Buyers
The general forecast and outlook for the Atlanta real estate market in 2021 calls for rising prices and stiff competition among buyers.
So what does all of this mean for people who are planning to buy? What should home buyers do (and know) in order to succeed in such a competitive housing market?
Here are our top-three tips for Atlanta home buyers in 2021:
1. Start sooner rather than later.
If you’re serious about buying a home in the Atlanta area in 2021, you might want to do it sooner rather than later. There are two reasons for this.
We talked about the expectation for rising house values. Most forecasts point to continued home-price appreciation in the Atlanta housing market. Buyers who postpone their purchases until later this year will likely encounter higher housing costs.
Additionally, mortgage rates could creep upward as we move through 2021. They hit a historic low during the first week of January, but they’ve climbed a bit since then. Forecasters from the Mortgage Bankers Association predict that rates will be higher at the end of 2021 than they are right now.
2. Expand and broaden your housing search.
Housing market competition tends to be highest close to the downtown area, where most of the jobs are located. Home prices can be higher there as well. This is true for the Atlanta real estate market, and for most major cities across the country.
As home buyer, you could benefit by expanding your search into surrounding areas and communities. You might encounter less competition from other buyers, as well as lower home prices. Be open-minded and flexible, when it comes to your desired location.
3. Make a strong first offer.
From an inventory and demand perspective, Atlanta is more of a sellers’ market right now instead of a buyers’ market. So you want to make a strong initial offer based on recent sales data.
Depending on where you plan to buy, you could be one of several buyers making an offer at the same time. This gives the seller a choice in which offer they want to accept. If you “lowball” the seller with a below-market purchase price, that house might slip right through your fingers.
The supply-and-demand situation favors sellers over buyers right now. That’s the current reality. So proceed accordingly. Make a smart offer backed up by market data.
Disclaimer: This article contains predictions and forecasts for the Atlanta, Georgia real estate market through 2021 and into early 2022. Forecasts were provided by third parties not associated with the publisher. Real estate predictions are the equivalent of an educated guess.