Welcome to MetroDepth’s Atlanta Housing Market Outlook for 2020. This report was created to give home buyers, investors, and real estate agents some idea of what to expect through the latter part of 2019 and into 2020, 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 Trends in 2019
Home sales in the Atlanta area declined during 2019, which suggests a softening of demand among buyers. According to the Atlanta Realtors Association, 5,464 homes were sold in June 2019 across the metro area. That was a -12.7% drop from the number of sales completed a year earlier, in June 2018.
This is just the latest sign that the Atlanta housing market might be undergoing a kind of shift. It’s not yet a classic “buyer’s market,” mainly due to ongoing inventory shortages. But there does appear to be a change happening.
All of this could work to the advantage of buyers. A slowdown in sales means that homes are sitting on the market longer. That tends to motivate sellers, while giving buyers a bit more leverage when it comes to offers and negotiations.
With mortgage rates still hovering at historic lows, and the real estate market starting to favor buyers, 2019 could be a good time to buy a home in this metro area.
That’s a high-level summary of current housing trends in the area. Now, let’s shift gears and look at some recent forecasts and predictions for the Atlanta real estate market through 2019 and into 2020.
A Look at Home Price Trends in 2019
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 2020 (the green shaded area).
According to Zillow, the median home value in Atlanta was around $259,100 during the summer of 2019. That was a gain of more than 8% from the same time a year earlier.
During that same 12-month period, home prices nationwide rose by an average of 5.4%. So in that regard, the housing market in the Atlanta, Georgia metro area has outperformed the national average in 2019.
Forecast Extending Into Summer 2020
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.
In the summer of 2019, for example, the research team at Zillow wrote the following:
“Atlanta home values have gone up 8.2% over the past year and Zillow predicts they will rise 2.8% within the next year.”
This particular forecast was issued in July, so it extends into the summer of 2020.
Of course, real estate market forecasts are the equivalent of an educated guess. So we shouldn’t get too wrapped up in the exact numbers being projected here. It’s the big picture that’s more important. The general consensus, as of summer 2019, is that house values in Atlanta could rise more slowly in the coming months.
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.
This is part of a broader trend that can be seen throughout the U.S. It’s certainly not unique to this particular housing market. Cities across the country are experiencing slower home-price growth in 2019. Some are even seeing a decline in home values (San Jose, California and Seattle, Washington come to mind).
But in Atlanta, it appears that prices will continue to inch upward through the end of 2019 and into 2020.
Housing Inventory Remains Tight in Atlanta
Housing inventory remains tight across the Atlanta metro area, as of summer 2019. This is a big reason why home prices continue to rise in this market, and why recent housing forecasts predict more gains in 2020.
In short, there just aren’t enough homes for sale within the Atlanta real estate market to meet the demand from buyers. And that is putting upward pressure on home values in the area.
According to the national real estate brokerage Redfin, the Atlanta metropolitan area had about a 2.7-month supply of homes for sale in June 2019. (Notice the all-important decimal there.)
This is a theoretical measurement used to track inventory levels over time. In this case, it means that it would take just over 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.
The supply constraints in Atlanta are holding back sales and forcing buyers to compete for limited inventory. So from a supply standpoint, this housing market still favors sellers in 2019. But, as mentioned earlier, there is a shift occurring. The Atlanta real estate scene could become more “buyer-friendly” over the coming months.
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.
The population of the city and surrounding area 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 and into early 2020.
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 3.3% as of May 2019. That was 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 and into 2020. This is partly what accounts for the (mostly) positive real estate market forecasts for Atlanta.
Will 2020 Be a Good Time to Buy in Atlanta?
Will 2020 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, 2020 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 2020. 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.