2024 Atlanta Real Estate Outlook In-Short
Hello Friends,
Happy New Year! I hope your holiday season was joyful and merry, or at the very least, not too exhausting! Now that it is January we move onward and upward, which incidentally describes my feelings about the outlook for the Atlanta housing market.
The operative term here is "upward," as in prices. Average mortgage rates have already fallen over a half a percent from December, to 6.62%(!) And The Federal Reserve in their December meeting indicated that they will reduce the Federal Funds Rate by 75 basis points, or in less esoteric terms a projected 0.75% decrease over the course of 2024. This overall reduction would likely be split into 3 separate rate cuts.
As I discussed in the December news letter, we are seeing plenty of signs of pent up demand, with many buyers sitting on the fence. I believe the news of fed rate decreases, and collective memory of the mayhem that low rates caused in 2021 and 2022, will be enough to push buyers off the fence in the spring market.
Currently, buyers still have leverage, with anemic demand and home seller's average days on market continuing to creep up. This leverage is manifesting in good deals for buyers, with the metro area average sale price being only 96% of the original asking price. These price cuts mirror those in the pre-COVID/low rate market. However, we are starting to see signs that this buying window could be short-lived. Mortgage applications have begun to rise again, up approximately 19% since peak rates at the end of October. Moreover, inventory levels fell in December, from 2.8 to 2.5 months of supply.
Accordingly, my advice to those eyeing a home purchase in 2024: do it now! We saw a similar dip in demand in the Fall of 2022 leading into 2023, however that window slammed shut by February-March, with prices rising sharply until the summer... and that was WITH a rising rate environment. Imagine what adding rate cut fuel to the fire will do. Those of you who know me know I never like to "sell," but part of my duty to you is to keep you abreast of current trends, and I firmly believe January-February is going to be the best window for buyers in 2024.