Atlanta, Georgia Housing Market Forecast for 2019

Welcome to the MetroDepth’s Atlanta Housing Market Outlook for 2019. This report was created to give home buyers, investors, and real estate agents some idea of what to expect in 2019, in terms of local housing trends.

To create this report, our team spent many hours reviewing current real estate trends in the Atlanta area. We’ve analyzed home prices, sales activity, economic factors, population trends and more.

This in-depth research allows us to offer a generalized forecast about what might happen in the months ahead. We recommend that you use this information as part of a broader research strategy, so you can make well-informed decisions regarding a home purchase.

Overview: Atlanta Housing Market Forecast for 2019

Home sales in the Atlanta area declined toward the end of 2018, which suggests a softening of demand among buyers. But a combination of population growth and somewhat limited inventory will help sustain housing demand in 2019, and will likely lead to additional home-price gains throughout the year.

Forecasts from multiple sources predict that home prices in the Atlanta area will continue to rise throughout 2019, though probably at a slower pace than the previous couple of years.

Given the current supply and demand situation in the area, it would not be surprising to see the median home price in Atlanta rise somewhere between 5% and 8% during 2019. The level of appreciation will vary from one area to the next, largely due to differences in supply level.

Overall, 2019 could be a good year to buy a home in Atlanta. Housing inventory rose during 2018, so home buyers should have more properties to choose from in 2019. And mortgage rates are still at historically low levels.

While mortgage rates declined at the end of 2018, they are expected to turn north during the first part of 2019. This, combined with the prospect of rising home prices, could create a sense of urgency among buyers. If the latest home price and mortgage rate forecasts turn out to be accurate, those buyers who postpone their purchases until later in 2019 could end up paying more.

Home Prices Past, Present and Possible Future

Home prices in Atlanta rose steadily over the last couple of years, outpacing the national average. This was largely the result of a lopsided supply and demand situation. In short, there was a limited number of homes for sale, but plenty of buyers and investors in the market. This put upward pressure on home prices and led to double-digit gains during 2018.

The chart below (courtesy of Zillow) shows home-price trends in Atlanta going back ten years or so. You can clearly see how property values in the area have risen steadily since “bottoming out” in 2012. You can also see the company’s housing market forecast for Atlanta through 2019 and into 2010 (the green shaded area).

Atlanta home prices
Chart: Atlanta home price trends. Source: Zillow.

According to Zillow, the median home value in Atlanta was around $256,000 at the start of 2019. That was a gain of more than 14% from the same time a year earlier. By comparison, home prices nationwide rose by an average of 7.7% during that same 12-month period.

During 2018, Atlanta outperformed many other real estate markets across the country, in terms of home-price appreciation. That trend could continue in 2019 as well.

At the start of 2019, the research team at Zillow was predicting that the median home value in Atlanta would rise by around 7.6% over the next 12 months. In contrast, they were predicting that home prices nationwide would rise by 6.4% during that period. So while Atlanta is expected to see a slower rate of appreciation in 2019, it could still be one of the top-performing markets among the major metros.

We expect to see something of a shift during 2019. Inventory has been on the rise lately, giving buyers more options to choose from, while easing competition at the same time. In previous years, Atlanta was more of a seller’s market due to constrained inventory and soaring demand. But this began to change during 2018.

In 2019, the Atlanta real estate market could shift more into “mutual” territory, or even become a soft buyer’s market. All in all, it could be a good year for home buyers across the metro area.

And speaking of inventory, let’s move on to take a closer look at the supply and demand situation. These are two important factors that could shape Atlanta’s housing market outlook through 2019 and into 2020.

Supply and Demand

One of the most notable changes in Atlanta’s real estate market is inventory. Like most major cities across the country, Atlanta suffered from a shortage of homes for sale over the past few years. But that was beginning to change toward the end of 2018. In 2019, buyers should have more properties to choose from (compared to those who purchased homes during 2017 or 2008).

During the summer of 2018, Atlanta had approximately a 2.5-month supply of homes for sale. (Notice the decimal: that’s two and a half months.) This is a theoretical measurement used to track inventory levels over time. In this case, it means that it would take about two and half months to sell all homes currently listed for sale, if no new properties came onto the market in the interim.

According to economists, a 5- or 6-month supply of homes is considered to be a “balanced” real estate market. So back in the summer of 2018, Atlanta was looking like a seller’s market in terms of inventory.

By December 2018, however, the local housing market inventory was up to about a 4.5-month supply. The Atlanta REALTORS® Association mentioned this increase in supply in their “Market Brief” report toward the end of 2018. They reported that “Atlanta area housing inventory totaled 14,455 units in November, an increase of 10.2% from November 2017.”

The bottom line to all of this is that there will be more homes listed for sale at the start of 2019 than there were during 2017 and (most of) 2018.

This is a trend that’s happening in a lot of the major real estate markets across the country, and it will likely have an impact on home-price appreciation. If Atlanta sees a better balance between supply and demand in 2019 (which is what we expect to happen), it could lead to smaller home-price gains in the future.

From a broad economic standpoint, this might actually be a good thing. Atlanta – like many other large metro areas across country – experienced an unusually high level of home-price appreciation from 2016 to 2018.

Such rapid gains can lead to affordability issues for many home buyers in the area. When home prices rise much faster than income and wages, it becomes harder and harder for a “typical” buyer to make a purchase.

Fortunately, the Atlanta housing market hasn’t suffered from the kinds of affordability problems seen in places like Seattle and San Francisco. And a slowdown in home-price appreciation during 2019 could help prevent such conditions from developing. Atlanta is one of many real estate markets across the country that could actually benefit from a cooling trend.

With that being said, we expect that this real estate market will be “warmer” than the nation as a whole during 2019.

Price Reductions More Common These Days

In 2019, home buyers in Atlanta could see more “price reduced” signs while house hunting. Slowing sales in the area have motivated sellers to be more flexible when setting their initial list prices, and when negotiating with buyers.

In 2018, the national real estate brokerage Redfin reported that the number of homes with a price reduction had increased steadily. They singled out Atlanta in particular, as having one of the biggest increases in real estate price drops:

“Las Vegas (+12.3 points to 28.1%), San Jose (+10.7 pts to 25.7%), Seattle (+10.1 pts to 37.1%), and Atlanta (+9.0 pts to 27.9%) were among the markets that posted the biggest year-over-year increases in the share of homes with price drops.”

This is a positive trend for home buyers in Atlanta. Those who plan to purchase a home in 2019 could have more negotiating leverage, when compared to those who purchased during 2017 and 2018.

Population and Employment Trends

You can’t talk about supply and demand within the housing market without touching on population growth. And Atlanta’s population trend over the last few years can be summed up with two words: gradual growth.

Atlanta’s population has grown gradually over the last few years. This brings more demand into the local real estate market, on both the rental and purchase side. As of 2017 (when the last measurement was taken) the city of Atlanta had a population of around 486,290. The broader metro area had a population of around 5.8 million during that year.

In April of that year, the Atlanta Journal Constitution wrote:

“Thousands of people are moving to metro Atlanta from around the country, increasing the region’s population to nearly 5.8 million, according to the U.S. Census. Metro Atlanta gained the fourth-most residents in the nation last year, with 90,650 additional people making the area their home.”

This growth trend contributes to demand within the local housing market, and is partly why home prices have risen steadily over the past few years. While housing inventory appears to be on the rise in Atlanta, demand could rise along with it (to some extent). As a result, we expect to see continued home-price appreciation for most parts of the metro area during 2019.

Employment is another important consideration for home buyers. This is true for investors as well as “regular” buyers who plan to occupy the homes they purchase. In short, a strong local job market gives buyers the financial means to purchase a home, and to keep up with their mortgage payments.

And there’s good news here as well. The Atlanta area experienced job growth during 2018, outpacing the national average during some months. The unemployment rate for this metro area was around 3.4% at the start of 2019. That’s down from a post-recession high of around 10% back in 2011.

Current economic and labor conditions within the Atlanta metro area are favorable and will likely help fuel housing demand throughout 2019. This is partly what accounts for the (mostly) positive real estate market forecasts for Atlanta.

Will 2019 Be a Good Time to Buy in Atlanta?

Will 2019 be a good time to buy a home in Atlanta?

That’s the big question a lot of investors, home buyers, and real estate agents are asking. This is a difficult question to answer across the board, because every home-buying situation is different. There are a lot of personal and financial considerations that must be taken into account.

But from a market standpoint, 2019 could be a great year to buy a home in Atlanta. Given the current supply and demand situation, additional home-price gains are likely for this real estate market. That would put new homeowners on a path to building equity.

Home buyers who need to use a mortgage loan could also take advantage of historically low mortgage rates. At the start of 2019, the average rate for a 30-year fixed mortgage loan was 4.55% (down from a high of nearly 5% during November 2018). That’s based on the weekly industry survey conducted by Freddie Mac.

But experts from both Freddie Mac and the Mortgage Bankers Association have predicted that mortgage rates could gradually rise during 2019. That’s not surprising when you look at the current state of economic growth, Federal Reserve policy changes, and other contributing factors.

For Atlanta-area home buyers, a sense of urgency might be warranted. It seems likely that home prices in Atlanta will continue to move north – at least in most parts of the area. Mortgage rates could inch upward as well. As a result, those buyers who stay “on the fence” for a while could encounter higher costs down the road.

Recap: Atlanta Home Prices

We’ve covered a lot of predictions, trends and other information in our real estate market forecast for Atlanta, Georgia. Here’s a quick recap of some of the key points:

  • The median home value in Atlanta was around $255,000 at the start of 2019. The median sales price (a different metric) was closer to $280,000 at that time.
  • Home prices in Atlanta rose by double digits in 2018, according to Zillow, posting bigger gains than the national average.
  • Home-price appreciation appeared to be slowing a bit at the start of 2019, but prices will likely continue moving north throughout the year.
  • We expect to see the median home price in Atlanta rise between 5% and 8% during 2019. But that’s just an educated guess.

Recap: Housing Supply & Demand

  • Housing inventory within the Atlanta real estate market rose during 2018, as more new listings came onto the market.
  • Home buyers who enter the market in 2019 should have more properties to choose from.
  • Growing inventory is one of the reasons why home prices are rising more slowly now than in previous years.
  • Price reductions are more common, partly due to supply growth.
  • In 2019, home buyers could have more leverage than in recent years.
  • Atlanta is starting to shift from a strong seller’s market toward more neutral territory. It could even become a buyer’s market by 2020.

Disclaimer: This report includes a housing market outlook for the Atlanta, Georgia area in 2019. Real estate forecasts and predictions are the equivalent of an educated guess and should not be considered financial advice. Please do not make any real estate or financial decisions based solely on the information found within this guide. This report is meant to serve as just one part of a broader research process.