The Atlanta Real Estate Summit sponsored by Atlanta Realtors Association and Atlanta Business Chronicle offered great insight into the housing market of 2017 based on trends from 2016 mostly and the years after the housing crash. Three pressing questions were answered and since I get asked those a lot, I decided to share some answers with you along with some optimistic info about our city.
Why, oh why, is there low inventory in low to mid price ranges ($200-450)?
Here are a few factors to take into account:
- A lot of people who have refinanced their houses at really, really low rates that we have been enjoying for a while now may not be willing to part with that low monthly payment;
- People may be unwilling to sell their current home because they will have to deal with the shortage of available houses and higher prices when they have to look for their next home;
- There is not enough new construction in the lower price end to increase inventory. You have to go really far out to find single-family new construction under $200,000 – $250,000, or even under $300,000. The cost of land, materials, and labor are driving prices of new construction higher, so builders are starting at higher price points. Check new construction prices HERE.
- Although the market has generally recovered, there are still areas that are under water and owners cannot afford to sell.
Will prices continue to rise?
With tight inventory, they are expected to continue to rise. We have seen 6% appreciation year over year, and appreciation is expected to continue in 2017 at 3-5% in average sales price.
Will interest rates rise?
The Feds decided not to raise them last week, and hopefully there will not be any drastic changes and interest rates stay below 5%. Refinancing may slow down, but purchases should still be affordable even with interest rates a little higher.
The good news…
Atlanta is experiencing job growth and wage growth. In 2016 Atlanta was in 4th position after New York, Dallas, and Los Angeles in job growth. Atlanta is one of the most affordable housing markets in the country where it is still cheaper to buy than to rent.