Metro Atlanta’s housing market last month accelerated into spring with a 20% jump in sales from February and a healthy increase in the number of homes listed — still only partially filling one of the market’s lingering gaps, according to the Georgia Multiple Listing Services.
In the 12-county core centered on the city of Atlanta, March saw 4,843 homes sold with a median price of $402,000. The number of homes listed for sale — inventory — rose 6% during the month.
In a balanced market in which buyers and sellers have roughly equal bargaining power, listings typically represent at least six months of sales, but current listings are still less than three months of sales, said John Ryan, chief marketing officer for Georgia MLS.
“We are seeing some signs of improvement, but the market is still challenged,” he said.
When listings are scarce and buyers bid against each other, prices tend to rise rapidly — and they were climbing at a double-digit pace through much of 2021 and 2022. But last year, the balance began to shift — slowly and incompletely — but enough to slow the price hikes.
The median sales price in March was up 6% from a year earlier, according to Georgia MLS.
And even as price increases more slowly, they continue to threaten the region’s affordability — long a draw for transplants from more expensive regions. The listing price, below $270,000 a decade ago is now $410,000, according to Realtor.com.
Atlanta is the most overpriced housing market in the country, with a growing risk of a pricing “correction,” according to data analyzed by researchers at Florida Atlantic University and Florida International University.
Homes in metro Atlanta are on average 42% overpriced, according to economist Ken Johnson, at FAU’s college of business. “While it’s unlikely prices will plummet dramatically, price performance could go flat for the future, or homes prices could see a slight decline even.”
Yes, prices are up, said Kristen Jones, owner of Re/Max Around Atlanta, but she scoffed at the idea that Atlanta is overpriced. “Values are market-driven based on supply and demand. And demand still far outweighs supply in Atlanta with no end in sight.”
Housing sales in metro Atlanta typically peak in May and June as families scramble to find homes in preferred school districts for their children before the next academic year.
But the region simply has too few homes to meet the demand created by a growing population, she said. “According to experts, we need to be putting around 50,000 homes on the ground to keep up with demand.”
Moreover, many zoning laws prevent builders from putting up townhomes or single-family houses on smaller lots, which would mean more dwellings and lower prices, Jones said. “We need to change zoning laws to allow for higher-density housing — smaller homes on smaller lots. This is the real issue we face.”
While the overall market is tilted to the advantage of sellers, constraints are suppressing both sides of the supply-demand equation, so that even with the stepped-up spring buying, the number of sales in March was 13.5% below that of a year ago.
The main challenge has been mortgage rates, which rose steadily from historic lows near 2.6% during the pandemic to three times that last autumn. Rates have slid modestly since then, most recently averaging 6.82%, according to Freddie Mac, which purchases mortgages on the secondary market.
That means buyers face dramatically higher monthly costs for loans, a problem especially for first-timers who may be stretching their resources even to have the downpayment for a home. With their purchase power crimped, they are at a disadvantage against buyers who can make all-cash offers — institutions, the affluent and those tapping family funds.
More than 19% of offers last month were all-cash, said Ryan of Georgia MLS.
But the number of sellers is also down from several years ago. That is partly because many long-time homeowners have felt “locked-in,” afraid to sell because even if they received a good price for their home, they’d face much higher rates for whatever they bought.
March housing, metro Atlanta*
Sales: 4,843
Median price: $402,000
Active listings: 12,689
March housing, compared to March 2023
Sales: -13.5%
Median price: -13.5%
Active listings: +33.8%
March housing, compared to February 2024
Sales: +20.2%
Median price: +1.0%
Active listings: +33.8%
Average mortgage rate, 30-year mortgage
Most recent: 6.82% (April 4, 2024)
High, 2023: 7.79% (October)
High, 2022: 7.08% (December)
High: 2021: 3.18% (April)
High: 2020: 3.72% (January)
Low, past five years: 2.65% (January 2021)
*Data is for the 12 counties centered on Atlanta
Sources: Georgia Multiple Listing Services, Freddie Mac
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