ATLANTA HOUSING MARKET 2021 – ATLANTA REAL ESTATE NEWS SPRING 2021

Hey this is Parker, your favorite Atlanta realtor! Well, spring is in bloom and the Atlanta real estate market is in boom. Things are even wilder now than they were last year, and as we all know, 2020 was a pretty wild year.

Here’s a quick update in some trends I’ve noticed in the Atlanta real estate market. As I mentioned before, due to the high demand last year prices were up 10 to 14 percent across the board. Well, that has definitely continued this year, and it’s led to some very interesting trends.

 

 

 

First off is what I call anticipated price inflation. Generally when a home lists, the list price of that home is based upon recently sold comparable properties. I think that people are already anticipating another five to ten percent increase in prices this year, and they’re going ahead and factoring that into their offers.

Many houses are going under contract above the list price, so that makes it increasingly likely that the bank appraisal is going to come in below the offered price. Which means that you have to be willing to pay the difference in cash. So, if their appraisal comes in low, and they need to make a slightly smaller down payment in order to cover the difference, that seems to be fine with many buyers now.

This observation is actually based on some conversations I’ve had with some of my lenders. They have started seeing some of the appraisals coming in low, because so many people are bidding up the value of these homes. What will happen is as these houses close and people make up the difference with cash out of pocket what’s going to happen is those will become new comps and those will help support the price valuations. You know, two or three months down the road, the problem right now is that it’s happening so quickly that the comps just simply haven’t had time to catch up.

The second trend I’ve noticed is the number of listing agents who are just simply overwhelmed and cannot keep up. Most agents are great communicators, and that’s one of the areas you really need to shine in order to succeed in real estate. So, if you’re dealing with just one buyer on one home search or one home under contract that’s going to generate you know a very significant amount of text and emails and phone calls. These listing agents where they may have a few houses listed and they’re dealing with multiple offers flying in from all angles – I mean they’re literally dealing with you know hundreds of emails and texts and phone calls – it’s overwhelming, it really is. So I’ve noticed a significant decrease in people’s ability or willingness to respond to inquiries, and it’s been a big challenge for everyone. It’s one of those situations where you have to realize you know this is not the norm, and you have to try to really extend your patience and understanding.

One of the houses we recently wrote an offer on received 29 other offers, and ended up under contract for $24,000 over the asking price. I’ve spoken with many agents who’ve had 20 plus offers on all of their listings. One of the houses we wanted to see recently came on the market on a Thursday morning, which is when a lot of homes list, and by noon that day every available showing slot for that house for the next two days had been filled up!

The third trend I’ve noticed is agents going straight to highest and best. Most of them will say send us your highest and best offer by 8 pm on Sunday, and we’ll make our decision Monday morning. Now in normal times, most houses will typically generate just, you know, one or two offers. In certain situations where you have a very high demand property, a house might get you five, six, seven offers, and that’s when you say: hey send us your highest and best. What you’re doing is you’re letting all the people who’ve currently made an offer know that hey, we are in a multiple offer situation, and I need to see your highest and best offer by 8 pm on Sunday. This is a fairly effective strategy in multiple offer situations because it just lets everybody know, yeah there’s a lot of offers on the table, so just you know put out your best offer right away. We’re not going to go counter offer and go back and forth and negotiate all the details, just show us what you got right now, and we’ll consider it. It also saves a lot of back and forth on the part of the agents fielding phone calls saying: hey do you have any other offers? Yes we’ve got lots of other offers, so send us what you got.

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The fourth and final trend that I’m going to talk about today is that houses that formerly would have sat on the market going wanting for a buyer are now flying off the market. Two years ago houses had to be HGTV ready, I mean perfect in every aspect:  all the paint, the floor, kitchen cabinets, everything had to be perfect or people just kind of turned their noses up at them. I’m a big believer in the diamond in the rough properties – I love those little old lady houses that are well maintained, but you know need some paint, need some freshening up. I think there’s a tremendous amount of value there, and apparently everybody in the Atlanta market has now come around to my way of thinking, because these houses are not staying on the market anymore. Now people are beginning to see that location is more important than anything else. You can fix up an okay house in a good neighborhood, but you can’t take a bad neighborhood and turn it into a good neighborhood. You can’t lower your property taxes, you can’t double the size of your house – you just have to move somewhere else!

So here’s some data looking at March 2021 versus March of 2020:  there were 800 fewer listings this year than there were last year, and houses under contract were up 12% this year versus last year, which is another indication that those houses that used to sit on the market that just didn’t pass the sniff test 18 months ago, those houses are all selling very quickly. Now this isn’t to frighten you, I only want to inform people about what’s going on in the Atlanta market. Demand is very high, but you can still find a good house. If you’re planning on moving here, you’re definitely going to want to bring your patience, and you’re definitely going to need to prepare yourself to work hard and face some disappointments, but ultimately you’ll find the house you want. I had some clients and we’ve had some close calls recently, where you know, we were in a multiple offer situation, we didn’t get the house, but ultimately we found a house for them.

You know, a few weeks later, a month later, and what’s interesting is that all of those clients came back to me and they said, you know Parker we actually ended up with the best house we’re so glad we didn’t get that other house because we really feel like we got the best house for our family, and that’s really nice to hear, because sometimes as an agent you know you’re you’re doing your best, you’re working really hard and for whatever reason, you get beat out by a cash buyer. It’s kind of hard to compete with cash so it is really nice to hear back from these clients and say you know, what all that frustration it worked out in the end.

Another point to note is that the more money you have to spend, the less competition there is for a house. The median sales price in Atlanta is currently around three hundred thousand dollars, which means half of the houses are above $300k and half sell for below $300k. Obviously there are far more people that can afford a $250,000 house than can afford a $500,000 house, and when you get to six and seven hundred thousand dollars, the competition falls off dramatically. Far fewer people can afford the more expensive properties, so if you’ve got you know five or six hundred thousand dollars to spend, be comfortable in knowing that you’re probably going to find a great house fairly quickly.

So I hope you found that helpful! If you’re buying or selling anywhere in Atlanta or anywhere in the state of Georgia, my contact info is in the box below please feel free to give me a call, shoot me a text, send me an email – I’d love to work with you.