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.

[Bolanle Ogunmakin]

@Ryan Alexander Great post and insight! Any advice on pivoting strategies? 

[Ryan Alexander]

Quote from @Bolanle Ogunmakin:

@Ryan Alexander Great post and insight! Any advice on pivoting strategies? 

I would stay in the market continue analyzing deals and look more long term, because we know when markets dip all that means is discounted real estate. Also homes over 400K are getting harder and harder to sell due to buyer financing falling through so maybe look in a higher price point for homes that have been on the market longer than 14-21 days. There may not be anything wrong with it, the home may just be over priced. 

[Bolanle Ogunmakin]

@Ryan Alexander Thanks for the solid advice! 

[Mike Anderson]

I just sold my primary in Atlanta specifically Roswell. By many accounts its the most over valued market in the US.. Up there with Boise. I am sure deal can be found, but ask yourself if you feel the most over valued market is going to generally be higher in the coming years than it is today with raising interest rates.

https://www.thegeorgiavirtue.c...

[Vinnie Da silva]

What I see from the lending side is that builders are panicking. There are still a lot of new construction still being built and not enough people interested since rates is up around 6%+. They are lowering agents commission whether the buyer uses their lender or not. Some builders are still at 3%, but I'm seeing a lot of them at 1.5 - 2.5 or even 4k flat fee in some cases. They are limiting the commission on the base price instead of the final purchase price. Some builders are even offering 4.99% fixed interest right now, where rates are still above 6%.