The Atlanta real estate market is expected to experience a shift in 2023, with new trends emerging as the market adjusts to changing conditions. Single-family home construction slowed down in Atlanta in 2022 compared to the previous year, with permit activity dropping by 41% year-over-year. On the other hand, construction for multifamily homes increased by 126% in January 2023 compared to the same period in 2022, which is the highest number since at least 1995. This increase could indicate a growing demand for rental properties in Atlanta.
Despite the increase in multifamily home construction, the Atlanta metro area still has a strong housing inventory, with a 4-month supply of homes. This supply is below the national average of 2.9 months, which suggests that the Atlanta real estate market is relatively healthy. Luxury homes in Atlanta are seeing an even higher supply of 10.9 months. The U.S. News Housing Market Index also shows that the housing supply in Atlanta has increased by 1.97% year-over-year.
In terms of rental properties, the rental vacancy rate for Atlanta was 5.4% in January 2023, which is below the national average of 5.8%. This decrease in vacancy rate indicates a growing demand for rental properties, which could be due to an increase in people moving to the city for work or other reasons.
The median home price in Atlanta was $350,000 in January 2023, which is a 1.5% increase from the previous year. This increase is in line with the national median existing-home sale price in January, which was $359,000. Additionally, homes in Atlanta are largely selling at a price close to their listing price, which suggests that the market is stable.
The median monthly rent in Atlanta in January 2023 was $1,941, which is up 4.3% from the previous year. This increase is in line with the national median monthly rent of $1,942. The demand for rental properties is also reflected in the increase in multifamily home construction in the city.
However, interest rates have been increasing steadily, with a 270 basis point increase in the interest rate on a 30-year, fixed-rate mortgage compared to the previous year. As of March 9, 2023, the interest rate on a 30-year, fixed-rate mortgage is at 6.73%. Additionally, builder sentiment in Atlanta has dropped to 45 out of 100 in February 2023, down from 84 in the previous year. However, it is on a steady upward trajectory from December 2022's 35.
Lastly, data from Black Knight Inc. shows that foreclosure activity in Georgia has increased to 0.3% of homes with mortgages in December 2022, up from 0.2% in the previous year. However, delinquency has decreased by 0.3%. This indicates that while the real estate market in Atlanta is healthy overall, some homeowners may be facing financial difficulties.
In conclusion, the Atlanta real estate market is expected to remain stable in 2023, with a strong housing inventory and a growing demand for rental properties. However, the increase in interest rates and the drop in builder sentiment could potentially affect the market in the coming months.
If you're considering buying or renting a property in Atlanta this year, or if you're an investor looking for opportunities in the Atlanta real estate market, the experienced realtors at AllPointsTeam can help you navigate this complex market. With our knowledge of the local area, industry expertise, and commitment to our clients, we can help you achieve your real estate goals in 2023.
Whether you're a first-time homebuyer, looking for a luxury property, or interested in investing in the Atlanta real estate market, we have the tools and resources to help you make informed decisions. Contact us today to learn more about how we can help you achieve your real estate goals in Atlanta.