MarketNsight, a leading real estate data and analysis provider, presented its state-of-the-market report and 2024 analysis at MarketWatch last week. Most notably, pending sales moved positive year-to-year for the first time since June 2022.

Even with higher mortgage rates (the 30-year Fixed rate is hovering at 6.99%), pending sales have seen a long, slow upward recovery. “Interest rate hikes may have smaller impacts than they did in the past,” said John Hunt, Principal and Chief Analyst at MarketNsight. 

To put it all into perspective, in April 1972, the interest rate for a 30-year Fixed mortgage was 7.29% and rising. If buyers had waited for interest rates to be below 8%, they wouldn’t have purchased until August 1992 -- 20 years later! During that time, the value of real estate tripled. 

Home Prices Are Up

"Although negative headlines saying home prices are dropping are rampant, home prices are still up about 9% year over year," said Hunt. “Real estate sales are down 20% from 2019 in terms of pending sales and closings, but nothing has been normal since 2019.”

So, who is buying today? There are two main groups – all-cash buyers and non-discretionary buyers who need to move for a new job or other personal reasons. 

Home Inventory

“We need an additional 38,000 homes to get back to a normal six months of supply in Atlanta,” said Hunt. “The last time Atlanta had six months of supply was August 2012.”

MarketNsight’s forecast for months of supply is that the market will peak at 3.6 months of supply and then start to drop in December.

Home Appreciation

The good news for homeowners? They’ve experienced a whopping 64% in home price appreciation since 2020 and are sitting on a lot of equity! The average home appreciation in the U.S. is 4.6% year over year, but Atlanta is seeing double-digit increases, with home appreciation up 10% year over year. 

Home Sales

Sales of high-end homes over $750,000 are surging. Sales of homes priced under $500,000 are down, primarily due to a lack of supply. In all cities covered by MarketNsight, new home starts are pushing further out from the center of the metro area.  

In 2021, 10 of the top 15 high school districts had homes for sale below $300,000. As Atlanta pushed out beyond I-85 and I-985 to the northeast with development, prices continued to escalate. Today, only one of the top high school districts is affordable with homes priced at $334,000, and that is Cass High School District in Bartow County. A review of lot sales shows that homebuilders are pushing out further to secondary and tertiary cities like Macon, Savannah, Augusta and the Golden Isles. However, Gwinnett, Fulton, Paulding, Cobb, Forsyth, Jackson and Cherokee Counties still rank highly in lot sales. 

Permits

Atlanta permits were down, but by the time we ended 2023, permits had turned around and were up 40%. The MarketNsight forecast for Atlanta MSA permits in 2024 is up 20-25%. MarketNsight is seeing similar increases in permits in all cities.