How’s The Atlanta Real Estate Market Doing In August 2023?

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Will the real estate market in Atlanta crash due to soaring interest rates? Buckle up as we dive deep into the data, debunk the myths, and uncover the truth about the housing market in Atlanta, Georgia. If you’re a potential buyer, seller, or just curious about the market, you won’t want to miss the insights I’m about to share.

Alright, let’s jump right in! Last December, NAR identified the Greater Atlanta Area as the top market to watch in the entire USA. Why? Because of our relative affordability, growing population, and booming job opportunities.


So how do we look in August 2023? Are we living up to the hype? Before we look at what’s happening locally, it’s important to understand what’s happening on a broader scale, so let’s start there. 


What’s on everyone’s minds right now? Interest rates, of course, and more specifically, when will we see lower rates? Ever since inflation hit 9.1% last June, the Federal Reserve has made it its priority to reel inflation back down to a target of 2%. To make this happen, the Fed manipulates the Fed Bank Rate, aka the federal funds rate.

What’s the Fed Bank Rate? It’s the interest rate at which banks lend each other money, basically. The Fed meets eight times a year to discuss monetary policy and vote on rate changes. Last month, they raised the Fed Bank Rate by another 25 basis points, from 5.25% to 5.5%. However, mortgage rates are based on the Prime rate, and typically, the Prime rate carries a premium of between 3% above the Fed Bank Rate. Depending on someone’s creditworthiness, the average interest rate currently for a 30-year conventional mortgage is right at 7%.

Now that we understand where these rates come from, when will they actually start to come down? Well, the good news is that inflation is now at 3% and is closing in on the Fed’s target of 2%. It’s possible we’ll see one more rate hike of 25 basis points (aka 5.75%) in September, but many experts are stating that further hikes beyond that won’t be necessary to curb inflation. Once inflation stabilizes for a few months at or near 2%, then the Fed will start slowly lowering the Fed Bank Rate. Based on what I’ve read, it’s believed that rates will start trending downwards in 2024, and by 2025 we’ll have a decrease of 2%, so we’ll see rates in the low 5% range by then.


So with all these crazy rates and a tough economy, homes must be going into foreclosure left and right, correct? At its worst during the last housing crash, between 2009 and 2010, almost 10% of every mortgage in America was 90 days late or in foreclosure. For perspective, before 2020, less than 2% were in distress. It peaked at 5% at the height of 2020, and today we’re back under 2%. After the last crash, credit guidelines were significantly tightened, and borrowers needed to be financially stronger to qualify for loans.

Foreclosure For Sale Real Estate Sign in Front of House.

Of the 9232 active listings in the Greater Atlanta Area at the time of this video, only 97 are foreclosures (aka real estate owned or HUD owned). That’s barely 1% of the market. That’s not to say this won’t change if things don’t improve, but it’s at a really healthy level right now.


With interest rates now at an average of 7%, are people actually buying in this market? The data points to yes. While activity has slowed these past 12 months, it seems the market has adjusted to the new norm of interest rates and has started purchasing again. 


Let’s start with actual buyer activity, aka showings on real listings. In July, there were 87,382 showings that happened in the Greater Atlanta Area. 61% of those showings happened between $0-500K, 34% happened between $500-1M, and 6% happened above $1M. I created this heat map that shows exactly where the hot pockets are in the region. You can see that the bulk of the activity is happening in the $300-600K range in Cobb, Cherokee, and Gwinnett. Activity in Fulton is more evenly distributed across the whole spectrum, with Milton being a hotspot for activity in the $1-2M range. On the lower end, the counties on the outskirts of the metro region, Douglas, Paulding, are seeing good activity in the $200-300K range, but inventory in those price ranges is very low, so competition is high.

So, 87,382 showings turned into 4,898 homes going under contract in July. Last year, 5,275 homes went under contract in July, a year over year decrease of 7.2%.


Shifting gears, Newly constructed homes are back to pre-2020 levels. In July, there were 1.4 Million new housing starts in the USA. The Greater Atlanta Area continues to be a strong location for new construction. As of the filming of this video, of the 9234 homes available for sale in the region, 23.3%, or 2152 units, are brand new construction, with more on the way. Basically, 1 out of every 4 homes available for sale is new construction right now. Not all of these homes are available for closing right away as they are in varying stages of construction, of course. But if we look at actual closed homes in July, 10.2% of all closings were new construction in metro Atlanta. That’s up 20% from a year earlier.

New Construction House Framing

If you’re interested in new construction, I can help you find the right builder and neighborhood using the relationships I’ve built over the last decade or more. Feel free to reach out. Click Here to schedule a 30-minute New Construction Strategy Session.


According to NAR, the national median sales price went down by 1% in the USA. In our neck of the woods, it remained flat year over year. In July 2022, it was $420,000, and this year, it’s $420,210, which is essentially the same. For perspective, the entire metro Atlanta region increased by 49.1% between 2020 and the end of 2022. That’s insane… 

The counties that saw a decline in median sales price were Cobb (-1.1%), Dekalb (-1.3%), Paulding (-2.1%), Douglas (-2.8%), and Fulton (-3.4%). However, there are counties that saw median home prices rise! Gwinnett is up 1.2%, Bartow is up 4.7%, and Cherokee County is up a whopping 10.3%. Yup, Cherokee’s been on absolute fire these last few years; the growth there is astonishing.


This year, homes are also selling for less than asking on average. In the Greater Atlanta Area, homes sold for an average of 98.8% of the asking price in July, whereas a year earlier, they sold for 100.2% of the asking price. That’s a 1.4% discount on asking prices. 


So the amount of time it’s taking once a listing hits the market to sell in the Greater Atlanta Area is currently around 31 days. Last year it was 17 days, so it’s taking 82.4% longer to sell listings this year. Of course, different pockets in the metro have different days on the market. For example, it takes an average of 39 days to sell homes in Fulton, while it takes just 25 days in Cobb and Gwinnett. More specifically, Atlanta is 40 days, Marietta is 19, and Lawrenceville is 21.


Inventory levels remain really tight in metro Atlanta. Basically, it’s the number of homes actually available for sale. We currently have 2.2 months of supply, up 10% year over year. Months of supply (or months of inventory) are the absorption rate. What this means is that it would take 2.2 months to sell every active listing on the market if no new homes hit the market.

As I previously mentioned, there are currently 9,234 homes available for sale. This time last year, there were 12,787, a decrease of 27.8%. 

Last year, in July, 8,891 new homes came on the market. This year, there were just 6,734 in July, a drop of 24.3% year over year.

We discussed earlier that pending home sales in July were down 7.8% from 5,275 last year to 4,898 this year.

Closings were down slightly; in July of last year, there were 5905. This year, there were just 4,568, which is a decrease of 22.6%.


Failed listings were up marginally as well. Just to be clear, just because a listing doesn’t sell during its listing period, or gets withdrawn, doesn’t mean that the property won’t sell in that calendar year. They often get re-priced, or repositioned with a new agent and eventually do sell. With that said, last year, in July, 1,438 homes expired or were withdrawn from the market, which represented 24.4% of the market. This year, in July, 1,297 properties expired or were withdrawn, which represents 28.4% of the market. Basically, last year, 1 out of 4 properties failed to sell during their listing period. This year, it’s 1 out of 3.5 or 2 out of 7. For perspective, back in 2012, it was 3 out of every 4 that failed to sell. 

Imagine being the lucky 1 out of every 4 houses that actually sold back then…


There are two main reasons why inventory levels are so low: 

The first has to do with homeowners who locked in a really sweet interest rate (2’s and 3’s) when they bought a few years ago and now they don’t feel like trading a relatively sexy looking mortgage (is that even a thing?) for a new one at 7%. However, there’s a big opportunity-cost to wait, and it’s not necessarily a good one…

The other has to do with home affordability. In some cases, buyers have been priced out of the market. Remember when I said that home values rose by 49.1% in metro Atlanta since 2020? That’s largely thanks to institutional buyers known as iBuyers, aka hedge funds, who came into the market and purchased everything with four walls for cash. By buying many homes in the same neighborhoods, each for more than the last, values were forced upward, and it became more difficult for the average person to afford a home. This year, cash transactions are down 26.3% year over year, so the iBuyers aren’t being as aggressive as they were.


Okay, it’s time to recap… Interest rates are up, but they are likely to come down over the next two years. But, there are LESS homes for sale, LESS new homes coming to market, LESS homes going under contract, LESS homes closing, LESS homes selling for their asking price, and it’s taking longer for most homes to sell. Are we in a buyer’s market?

Nope, not even close, at least not yet. We’re actually still in a Seller’s market by definition, and one that still has legs (though that’s slowly changing). You see, a Seller’s market is defined as having 0-5 months of inventory. A balanced market has 5-6 months of inventory. A Buyer’s market has 6-12+ months of inventory. Remember, that’s the amount of time it would take to sell everything if no new homes hit the market. It’s supply and demand. When demand outweighs supply, like it currently does, and inventory is under 5 months, it’s a Seller’s market, and we’re at 2.2 months. 

The silver lining is that we’re seeing Sellers offer incentives and concessions that they typically only offer in a balanced market. I think it’s because, as a market, we all got caught up in the craziness of the last two years that when something doesn’t sell overnight, doubt creeps in. It’s all perception, but it’s really good for buyers right now because two years ago, there were ZERO incentives from Sellers for them to buy, everything was skewed in favor of home sellers.

Today, we’re seeing contracts under asking price, more equitable terms, and monetary concessions that can be used towards a buyer’s closing costs or rate buy-down. 

There’s an opportunity for the shrewd buyer to save themselves some serious money over the next couple of years using a 3-2-1 rate buydown, and the right agent can help you negotiate the terms needed to make that happen. Feel free to contact me for more information about how it all works. 

Thanks for reading the Atlanta Real Estate Market Update for August, 2023. 

Terence Richardson

Terence Richardson

Terence Richardson is a licensed REALTOR® who has been practicing real estate in metro Atlanta since 2009. He is the founder and team leader of Richardson Real Estate Group. Terence is also a husband, dad, adventurer, dog & cat lover, foodie and hockey & football fan.

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