Mid-year report: Intown home sales and values ​​remain strong, but condos weaken

The Intown real estate market has remained active, despite rising interest rates. Local real estate professionals report that businesses, investors and new residents continue to be attracted to Intown, leading to high prices and low inventory, especially for single-family homes.

Sarah A. Strohschein
Strohschein, Engel & Völkers Atlanta real estate advisor, said she sees things heating up for the Intown market. “The first quarter of 2024 rebounded from a record level of activity in the fourth quarter of 2023. New listings and new expectations increased by approximately 30% in the first quarter, which helped launch the spring 2024 market,” she explained.

Strohschein said the market remained stable with modest home appreciation. Some property types are more competitive than others, she added, with single-family homes being the most competitive.

“Homes that are in good condition, located in desirable downtown neighborhoods and priced appropriately always sell quickly,” she said. “Typically speaking, these properties are receiving multiple offers, but in the single digits, not the double-digit multiple offers that we saw when interest rates were lower.”

She reported that mortgage rates moderated from a high of 7.79% in October 2023 to less than 7% in March 2024. “Many buyers on the sidelines continued to take a break through the first quarter 2024,” she said, but added that people who have been waiting for rates to drop, they are entering the market.

“They understand that home prices in Atlanta are only going up and the option of refinancing in a few years is a good solution,” she said.

Ian Olivier
Oliver, a real estate agent with Engel & Völkers Atlanta, said that in his opinion the overall Intown market, including condos, townhomes and single-family homes, is a bit static.

“Since interest rates haven’t improved, I haven’t really seen a significant uptick in activity, although the spring selling season has my phone ringing more right now. Year after year, this is quite common, regardless of market factors,” he said. “But in general, persistent interest rates leave some buyers on the sidelines.”

The good news, Oliver said, is that Atlanta continues to thrive thanks to job growth and strong job offshoring. “Atlanta is proud to announce that it is now the sixth largest metropolitan area in America! While the growth is metro-wide, there is significant growth in Intown as well,” he said.

Lee Hall
According to Hall, managing broker of Intown at Ansley Real Estate Christie’s International, rising interest rates have caused some slowdown in some areas of Intown, “…particularly for first-time home buyers, but many “Lenders have great programs to help these buyers,” he said.

The average price in metro Atlanta increased 8% year over year to $500,000 for a single-family home and $403,000 for a condo, he reported. “For context, just five years ago the average prices were $338,000 and $287,000,” Hall said.

Nonetheless, Hall emphasized that he is still optimistic about the Intown real estate market because it is a great and vibrant place to live. “However, the Intown condo market has seen some slowdown,” he said.

Condo sales hit a snag
Oliver explained that, for condos, the last six months have shown a slight decline in the volume of sales closed compared to the previous six months, with an average of approximately 60 days on the market to sell/close compared to 50 days on the market respectively. .

“I largely attribute this to Fannie Mae and Freddie Mac, who recently made changes to their deductible limits for water and flood damage for condominiums,” he said.

Due to the changes, some condos were unable to sell until they adjusted their insurance coverage to meet the new compliance requirements. “It took time for many associations to come into compliance,” Oliver said. “This has certainly slowed condo sales in 2024, but the dust is settling. There are many exciting opportunities for buyers looking for a condominium! »

Hall pointed out another problem facing potential condo sellers. “Many high-rise condominium buildings completed between 2004 and 2007 are undergoing normal, but costly, age-related scheduled maintenance,” he said.

“The average days on market can be as high as 60, while months on inventory is 4½, which is a more normal environment,” Hall continued. “If we look at the luxury market, homes sold for over a million dollars, we still have positive numbers with an inventory increase of 12%, a sales increase of 15% year over year other and days compared to the market average of 67.”

Looking forward

Oliver expects the Intown market to remain largely the same. “As long as inflation remains as stubborn as it is and mortgage rates remain high, there will not be the catalyst we need to spark meaningful change,” he said.

Strohschein expects that inventories will remain below market clearing levels and that more buyers entering the market will maintain market competitiveness.

“Our population continues to grow and for people coming from states where real estate is much more expensive, Atlanta is very affordable,” Strohschein said. “Investing is also desirable in Atlanta for many domestic and foreign investors. I think this will continue to push prices up.

If interest rates fall, Hall expects the real estate market to relax a bit. “It’s very difficult to part with interest rates of 3 to 4 percent, so people are staying put to renovate and modernize. But, from 2023 to 2024, inventory actually increased 37% and sales increased 30%, but pending sales are now down 12%,” he reported.

Although that number seems high, Hall said that’s because it’s actually a small number. “It doesn’t look like an uptick,” he said. “And factoring in more people moving to Atlanta, you can see the challenge.”

Hall said markets don’t like uncertainty and presidential election years are typically a bit slower. “However, I expect things to remain stable and generally stable. Days on market may be a little longer, but that is not an indication of value, just a return to a normalized market,” he said.