By John Stemlar, Sage Real Estate Advisors
The media is beginning to report what real estate professionals have known for months. In many north-metro Atlanta submarkets, single-family home sales have slowed; properties are staying on the market longer and sellers are dropping asking prices. For example, in Brookhaven, Buckhead and Sandy Springs, about one-third of the homes listed for sale have reduced the initial asking price, some by more than 10%. So, what’s going on? After years of it being a pure sellers-market, the pendulum seems to be swinging back a bit as the real estate market seeks balance.
Logically, the cost of owning a home can’t, year after year, rise faster than the income growth of those wanting to buy. In many parts of Atlanta, home price increases have far outpaced inflation, including income growth. Layer in rising mortgage interest rates and property taxes, and affordability becomes an issue. The buyer side of the market is simply pushing back.
Implications for Sellers – Home values are not falling; in fact, they continue to rise in most areas, but at a slower pace. Sale price expectations may need to be adjusted. Believe the market data and be objective. Find an agent that you trust, then trust that agent’s strategy for pricing your home in the current market environment. Be wary of agents that will over-value / price your home just to secure your listing (only to recommend a price drop later).
Implications for Buyers – Homes that were initially over-priced and have languished on the market could represent a good buying opportunity. Homes that are over-priced at the outset typically end up selling for less than they would have, had the home been correctly priced in the first place.