Up, Up Up! Home values in Atlanta in 2018 have surpassed the peak hit during the housing bubble of 2006 and are at their highest value in more than a decade. So, I wonder almost daily should we be worried about another bubble bursting and crashing housing prices? Or are we merely in for a slowdown?
Having been in real estate for 19 years I have seen the ups and downs of the real estate cycle. Therefore, I do a lot of market research, so I can draw my own conclusions and prepare my clients properly.
I think that we are headed for a slowdown from the crazy double-digit rates of appreciation we have been seeing over the past few years. This is not sustainable as home prices are becoming too high for the average buyer to qualify to purchase a home. And it is becoming harder and harder to find a property around $250,000 in the Atlanta area. Some buyers are sitting out because they cannot find homes in their price point. If they do find a home that they like, they are getting outbid in multiple offer situations. I admit that I worry when I see homes selling at $ 25,000 over appraised value with buyers willing to bring the that extra cash to closing just to get into a home. That’s not a very good idea.
I predict that that home priced under $400,000 will continue to be very competitive over the next year with inventory remaining scarce. Appreciation for home owners will slow to a more normal 4-5% rate.
In the over 450,000 price range I predict appreciation will be flat in 2019 and the days on market will become longer because more inventory is sitting. We have already started to see homes in this range sitting on the market longer and having more price reductions.
So basically, I do not see a “crash” coming but I think we will start to have a more realistic market in 2019. Builders are feverishly building to capitalize on the lack of inventory. Once this inventory hits and supply increases the market should even out to more normal rates of appreciation.