Metro Atlanta Market

[Ryan Alexander]

Hi BP community, 

Being a real estate agent in and around Atlanta we, like agents in most other areas, have seen a meteoric rise, some homes almost doubling in price over the past 3-4 years. As we all understand, this is not sustainable and we are starting to see this here as the average interest rate climbs to 5.75%-6%. The rising intrest rates coupled with home prices holding at all time highs (for now) have pushed many home buyers out of the market entirely. Now with a basic understanding of supply and demand we can infer that if supply stays the same and demand falls the price must fall as well. According to market stats provided by First multiple listing service, in January the months supply was at 1.1, this means that it would take 1.1 months to sell through the inventory at the time the calculation was taken. As of June we were at a 1.8 months supply. Now this metric is indicative of the current supply, but the same economic principles apply and that is that if the supply increases by 60% in 6 months the price must also fall. Now to go full circle, the truth is that the supply did not just randomly jump, the rising intrest rates have pushed buyers out of the market resulting in a surplus of inventory. 

Now that we certainly are experiencing the market shift beneath our we can do one of two things. 

1. Freak out because the world is on fire and we are all going to die.....

2. OR we can pivot our strategies by having high level conversations and taking tips from what we see in this group. 

My conclusion, I wish I had a crystal ball but I don’t and probably none of you do either. So we must rely on facts and statistics.

[Michael Dumler]

@Ryan Alexander, the point for investors specifically, it's important to stay on top of and analyze the market even with the uncertainty we're experiencing now. The bottom line, if the deal still pencils out with high-interest rates, buy and hold. This is a principle that's taught time and again. Unfortunately, I'm starting to hear newer investors especially backing out due to fear, uncertainty, and doubt. Not to sound like a broken record, but be fearful when others are greedy and be greedy when others are fearful. Point number two is spot on, it's time to pivot strategies and adjust our investment plans with the market. Consistency and adaptation are what sets apart successful investors from those who sit on the sidelines waiting for a "crash" to happen until they buy.