Overlooking Piedmont Park at dusk in Atlanta, Georgia. In the overwhelming majority of cities in the … [+]
Like many cities in the southern United States, Atlanta has experienced a resurgence in popularity as a place to work and live. From a population of approximately 394,017 in 1990, Atlanta’s population has grown by more than a quarter (26.7%), to 499,127 people in 2022.
When real estate markets across America revved up in 2021 and 2022, Atlanta was one of many to feel the pandemic-induced pressure on real estate prices and homes available for sale. But after the Fed’s series of rate hikes from 2022 to 2023, many housing markets have been brought back down to earth. The question is how difficult it is to return to earth.
Read on to learn the top trends that will develop in the Atlanta real estate market in 2023 and the likelihood of a real estate market crash.
Atlanta Real Estate Market 2023: Overview
Through our analysis of housing data from red fin
RDFN
, Metro Atlanta’s real estate market may not be as hot as it was in 2021 and 2022, but prices continue to rise. The median sales price of a home in metro Atlanta reached a high of $400,000 in May and June 2022. Since those peaks, home prices have not declined much. For the entire metro Atlanta area, the median sales price decreased 2.5%, from $400,000 in May 2022 to $390,000 in May 2023; while the year-over-year median sales price from June 2022 to June 2023 barely changed, falling from $400,000 to $399,900.
In the city of Atlanta proper, home prices peaked in May 2022, when Atlanta’s median sales price reached an all-time high of $457,856. Since then, prices have fluctuated but have not experienced a lasting decline. From a median sales price of $457,856 in May 2022, it only decreased 1.7%, to $449,990 in May 2023. And from June 2022 to June 2023, the median sales price of Atlanta actually increased 5.5%, from $415,000 to $438,000. The latest month we have data for is August 2023, and again, Atlanta home prices increased 4.1% year over year: from a median sale price of $400,000 in August 2022 to $416,500 in August 2023.
The city of Mableton, located just under 15 miles west-northwest of Atlanta, saw the largest year-over-year growth in real estate prices. From a median sale price of $339,950 in August 2022, prices increased by almost a fifth (19.9%), to a median sale price of $407,500 in August 2023. The City of Tucker is a similar distance from Atlanta, but to the northeast. Home prices in Tucker increased almost the same amount as in Mableton – 19.8% year over year, from a median sales price of $388,500 in August 2022 to $465,525 in August 2023. Indeed, only four cities in metro Atlanta – South Fulton, Stonecrest, Douglasville and Dunwoody (one of Georgia’s wealthiest cities) saw prices decline from August 2022 to August 2023.
Inventory in the Atlanta housing market continues to decline
While many other major real estate markets, like Las Vegas, have seen their housing inventory begin to pile up, that’s not the case in Atlanta. Every real estate market we analyzed in the greater Atlanta area experienced a year-over-year decline in available inventory. For the Atlanta metro area as a whole, available inventory fell 33.7%, from 26,403 homes for sale in August 2022, to 17,514 homes in August 2023. In Atlanta proper, the decline was was less strong but remains a significant drop of 22.8%, of 3,257 housing units available in August 2022, compared to 2,513 housing units available in August 2023.
Three cities in the greater Atlanta housing market saw their housing inventory cut in half: Woodstock, where available inventory fell 50.9%; Dunwoody, where it fell 57.5%, and Johns Creek, where it fell 57.9%. With inventory tightening overall, it’s no surprise that the majority of cities in the greater Atlanta housing market saw their prices continue to rise from 2022 to 2023.
Homes for sale in the Atlanta real estate market are staying on the market longer than before
One of the most useful indicators for analyzing real estate market activity is the time a home for sale spends on the market before being purchased. Redfin calls this metric Days on Market, which represents the monthly median number of days on market a home for sale is before being taken off the market. In metro Atlanta, the median number of days on the market for a home for sale increased from 21 days in August 2022 to 26 days in August 2023, equating to an annual increase of approximately 23.8 %. However, in the city of Atlanta proper, the year-over-year increase in median days on market was smaller – 16% – going from 25 days on market in August 2022 to 29 days in marketing in August 2023.
Below is a table detailing trends in days on market in the 26 areas we analyzed in the Greater Atlanta real estate market:
The result of a crash in the Atlanta real estate market
Based on the data and our analysis, it doesn’t appear that Atlanta’s real estate market is going to collapse. One of the biggest indicators of a coming housing crash is a significant buildup in housing inventory. This has absolutely not happened in the Atlanta real estate market. While it’s true that homes for sale are staying on the market longer than last year, median days on market for most cities in the Greater Atlanta housing market have returned to more normal levels, rather than abnormally long.
Another factor that argues against a crash is the fairly consistent sales-to-listing ratio in the central cities of the Atlanta metro area. When real estate markets are booming, the sales-to-listing ratio tends to exceed 100% because homes are sold for more than their original list price. Although Atlanta’s real estate market has definitely gotten hot in 2021 and 2022, its sales-to-listing ratio has remained very stable. Take the example of the city of Atlanta:
- Sales to List Ratio in Atlanta, August 2018: 98.3%
- Sales to List Ratio in Atlanta August 2020: 98.1%
- Sales to List Ratio in Atlanta August 2022: 98.8%
- Sales to List Ratio in Atlanta August 2023: 99.3%
The Atlanta real estate market seems to be moderating instead. But the fact that prices continue to rise and inventory continues to decline means that the problems in Atlanta are not a crash but a continued tightening of the housing market.