Metro Atlanta homes sit on the market longer as buyers remain on sidelines

Metro Atlanta homes are sitting on the market longer as prospective buyers lay low because of elevated interest rates and home prices.

Real estate agent Joe Crochet knows.

In late April, he listed a house for sale in Medlock Park, a neighborhood north of Decatur known for its namesake green space and midcentury ranches.

Within a week, eight other homes came on the market in the same neighborhood. It took three months for Crochet to find a buyer, who closed on the property in late July.

“The market just shifted completely in May,” said Crochet, an agent with Compass. “We had a huge influx of inventory. … Buyers are still on hold because the rates haven’t really dropped that much.”

Prospective buyers could be waiting to see if the Federal Reserve lowers interest rates later this year, according to a July analysis from the Georgia Multiple Listing Service. They could also be sidelined because of economic uncertainty around the impact of new tariffs.

Home sales in July dipped 4% compared to the same month a year ago, according to Georgia MLS data for the 12-county metro Atlanta area.

Homes are now taking longer to sell as buyer demand slows. In July, the median days on the market crept up to 28 days, about four times longer than the same month three years ago.

“I think there are a lot of buyers sitting on the fence,” said Todd Emerson, general manager of Atlanta-based Harry Norman Realtors. “It could be a function of affordability challenges. … What they want to buy, they can’t afford right now because of the interest rate situation.”

Meanwhile, the number of active listings in July surged more than 30% year-over-year. Metro Atlanta ended July with about 4.8 months’ worth of housing inventory, up from 3.6 months a year ago. The housing inventory reflects the number of homes listed for sale.

Experts say the increased inventory signals a more balanced market. When interest rates had dipped to historic lows during the COVID-19 pandemic, there was less than a month of homes listed for sale, leading to bidding wars and soaring prices.

“Buyers now have more time to make decisions, signaling a shift toward a more balanced or buyer-favored market,” John Ryan, Georgia MLS chief marketing officer, said in a prepared statement.

A Decatur home shows the "under contract" sign on Monday. (Natrice Miller/AJC)

Ryan, in an interview, said sellers are offering concessions in about half of homes sold now, such as paying some closing costs or reducing the listing price for necessary repairs.

“There’s more choice,” Emerson said. “There’s greater room for negotiation.”

Mostly gone are the days when a seller could expect to sell above their list price, Crochet said. The median sales price for metro Atlanta homes was $415,000 in July, the same as a year ago, according to the Georgia MLS.

Emerson said with previously owned, single-family homes, he still sees “modest price appreciation” of 1% to 2% year over year. The condo market is seeing prices soften, he said.

“While the crazy appreciation has kind of flattened, prices haven’t dropped for the most part in metro Atlanta,” said Kristen Jones, owner of Re/Max Around Atlanta. “We don’t expect them to because there is still a lot of pent-up demand.”

One glimmer hope for would-be buyers: Mortgage rates recently hit their lowest level since last October. The average rate on a 30-year fixed mortgage declined to 6.58%, mortgage giant Freddie Mac said late last week.

Mortgage rates are still about double what they were before 2022. That’s another factor keeping buyers sidelined, often called the “lock-in effect.” Homeowners who secured an interest rate below 4% are reluctant to trade that in for a higher rate and make a move.

Mortgage rates are impacted by several factors, including the Federal Reserve’s interest rate decisions, the performance of the bond market and economic conditions such as inflation and unemployment.