A combination of migration trends, a strong local economic recovery, and low interest rates, among other factors, could position Atlanta’s residential market for a record-setting year, Harry Norman Realtors says in its 2021 Metro Atlanta Residential Real Estate Forecast.
Recently awarded the national QE Award as one of the top five large brokerage firms, Harry Norman Realtors said that limited inventory is the only foreseeable obstacle that could stymie Atlanta’s residential market this year.
“The only obstacle to a thriving market in 2021 is short supply of homes. If consumer confidence continues to improve, Atlanta could break the record performance of the past two years,” the company’s report reads.
The home market entered this year with much less inventory than is normally the case. While a balanced market historically means a five- to six-month supply of homes, inventory across metro Atlanta averaged just 1.3 months of supply entering 2021, with some submarkets around the city even seeing inventory dip below a month’s worth, according to Harry Norman.
The company says that while the pandemic brought a sudden halt to sales in March and April, by the end of 2020, the average sold price had risen 11 percent year-over-year to $393,000.
The market was buoyed both by nationwide factors like nearly record low mortgage rates but also local ones like resilient state and local economies: both phenomena that Harry Norman says in its forecast it expects to last through this year. Both Fannie Mae and Freddie Mac expect 30-year fixed-rate mortgage to be below 3.0 percent this year, while a University of Georgia Terry College of Business economic forecast projects a faster recovery for the state than nationwide.
The brokerage firm does name slowed residential rent growth as a potential headwind hitting the for-sale housing market. In recent years, homeownership was often preferred over renting because of rising rents, but that dynamic has reversed directions to an extent.
“When looking at an average 3-bedroom house it is now considered to be more affordable to rent than to buy in both Cobb and Fulton counties,” Harry Norman Realtors says in its report.
But the company points to a host of other factors that signal continued strong demand in the residential market and lead to it forecasting a 4 percent to 7 percent growth in average home price in 2021.
One such factor is population growth. Along with other cities in Georgia, Atlanta is one of the country’s fastest-growing cities. In addition, it also remains one of the more affordable metros. Nationwide, the monthly average cost of homeownership payments cross 30 percent of income. But in Atlanta, it sits at 23.8 percent, putting the city in the upper quadrant of affordability for large cities across the U.S., according to the Federal Reserve Bank of Atlanta.
Leading the way in price growth, Harry Norman predicts, will be the suburbs, with last year ushering in more homebuyers looking trade location for home qualities like comfort.
“The trend of greatest price growth coming from the suburbs is expected to continue,” its report reads.
