Atlanta area home prices fell in October with steep declines in some places

Metro Atlanta home prices softened in October as fears of economic instability and a federal government shutdown spooked would-be buyers, experts say.

Homes were on the market longer this year, and the number of active listings has surged as buyers sit on the sidelines, fretting about the economy and feeling unmotivated by mortgage rates, which have come down but remain higher than a few years ago.

As demand has slowed, the median sales price dropped to $390,000 in October, down 2.4% from the same month a year ago, according to Georgia Multiple Listing Service data for the 12-county metro Atlanta area. But, experts said, drastic price drops are not likely ahead.

The number of homes sold stayed about flat in October year over year, but the sales volume grew 1.2% to more than $2.3 billion.

Meanwhile, the inventory of homes for sale climbed, although at a slower pace of growth than earlier in the year. In October, there were 21,672 active listings, up more than 17% year over year. That’s about 4.7 months worth of housing inventory, signaling a more balanced market that’s shifting toward favoring buyers.

“I’m hearing agents say they’re hosting open houses every Sunday, and they’re seeing the same group of buyers coming through week after week,” said Todd Emerson, general manager of Atlanta-based Harry Norman Realtors.

But those buyers are not pulling the trigger on a purchase as quickly as they once were, he said. The number of homes put under contract in October declined about 27% compared to the same month a year ago, according to Georgia MLS.

“There’s just a lot of waiting on the sidelines going on right now with a lot of buyers for a multitude of reasons,” Emerson said.

One is the longest federal government shutdown in history, which stretched the entire month of October but reached a resolution this week. The U.S. House voted Wednesday to reopen the federal government.

Concerns about job security are also rising. A flurry of big-name companies have recently announced layoffs in metro Atlanta, including Comcast, UPS, Carter’s and General Motors.

“Even if your job isn’t being impacted, you’re hearing this in the news all the time,” said Chris Burell, president of the Atlanta Realtors Association and chief growth officer at Engel & Volkers Atlanta. “It just starts to build this fear where you don’t want to make a decision about a big purchase.”

County by county

Some metro Atlanta counties saw more pronounced dips in home prices. In October, the median sales price was down 8% in DeKalb County, about 7% in Douglas County, and more than 5% in Forsyth and Clayton counties, according to Georgia MLS.

Fulton, Cobb, Cherokee and Henry saw median sales prices rise in October.

A contributing factor for some counties with price declines could be their distance to job centers, Burell said.

“Quality of life is still very big for most buyers,” Burell said. And with the swath of inventory on the market, buyers have more choices.

Burell also noted that county-level data covers broad areas. The variations in home prices that span counties could skew the data, he said, compared with looking at specific cities or neighborhoods.

John Ryan, chief marketing officer of the Georgia MLS, said the overall softening in home prices across metro Atlanta in October signals a more healthy, balanced market.

“There’s some stability that is going on in terms of the housing prices,” Ryan said.

“That’s a good sign that the market is kind of balanced out from where we were over past years,” he later added.

During the COVID-19 pandemic, when interest rates dipped to historic lows, home prices soared. The median sales price was $294,765 in October 2020 for the 12-county metro region and has increased more than 30% in five years. The pandemic era featured bidding wars and sales of homes before they even officially hit the market.

Remembering that time, some sellers today may have unrealistic expectations about what their homes are worth.

“We still have a lot of overpriced inventory out on the market,” Emerson said, referencing existing homes for sale, not new construction. “Almost 50% of the active single-family homes for sale have done a price reduction in order to attract offers from buyers.”

He also said about 20% of listings in October expired or were withdrawn, citing data from First Multiple Listing Service for a six-county region that includes Cherokee, Cobb, DeKalb, Forsyth, Fulton and Gwinnett counties.

“One in five homes, if you think about it, don’t result in going under contract, even when they do a price reduction,” Emerson said. “That’s pretty high.”

Experts say they don’t think home prices will decline significantly in coming months but will more likely remain flat.