Fall Real Estate Market Update - Atlanta - November 19th, 2020
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Leaves changing in Springlake Neighborhood
The year 2020 has been different in so many ways, many of which we never wanted. We can also find plenty of reminders of resilience, opportunities for gratitude and reasons for optimism as Thanksgiving arrives. Our hearts are with those who have had it harder than others recently, whether because of financial, health or other setbacks as a result of the pandemic. While this year’s circumstances have understandably led us to practice precautions, such as social distancing and mask wearing, it has also opened up rare opportunities that we want to share with others.
We wish you all the best this year! Here are a few photos we snapped of fall in Atlanta and residential real estate trends to keep an eye on:
Interest Rates Just Hit Another Record Low (For the 13th time this year)
According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed rate mortgage for conventional conforming loans (those that are under $510,400) with 20% down payment are at a record low of 2.72% as of November 19, 2020.
Fall scenery and people playing in Beaverbrook Park in Buckhead
National Personal Savings Rates in 2020: Highest Since 1975
The national Personal Savings Rate in the U.S. is well above the 5-8% range that it has been in for most of the time over the last 10 years. This is personal savings as a percentage of disposable personal income. As of September 2020, the national savings rate was 14.3%, as the chart below of data collected by the U.S. Bureau of Economic Analysis shows.
(Source: U.S. Bureau of Economic Analysis data graph on
St. Louis Federal Reserve website)
Now is a great time to sell a home, since people have in been saving money at the highest rate since 1975 at the same time as financing is available at record low mortgage interest rates. Together, this increases buyers’ purchasing power.
For these same reasons, record low interest rates and exceptionally high personal savings, now is a great time for buyers with good income and job security to file for a mortgage application. This way, these buyers can take advantage of the low interest rate conditions and lock in a fixed interest rate for the long-term. While we do not know what interest rates will be further into the future, they may be higher five years from now.
Pending Sales Contracts Are Up Over 11% in Greater Atlanta Area
(6-Months ending October 2020 versus same period in 2019 & 2018)
Demand is high in the Greater Atlanta Area, where pending sales for the 6-months ending October 2020 is up over 11 percent versus the same period in 2019. The information below is a total of all pending sales for single-family homes, townhomes and condominiums.
(Source: First Multiple Listing Service)
The chart above demonstrates a trend of increased demand during this period over the last three years.
# of Mortgage Applications For Home Purchases Nationally, Week of Nov. 13th: Up 26%
According to the Mortgage Banker’s Association’s weekly survey, the number of mortgage applications to buy a home was up 26% for the week ending November 13th, 2020. Mortgage applications are an early indicator of future home sales. This was the 26th straight week of year-over-year increases in mortgage applications to buy a home (more applications were made for each of the last 6-months of 2020 than in the prior year).
# of Homes For Sale is Down Dramatically (36%) in Greater Atlanta Area
The total number of homes for sale in the Greater Atlanta Area as of October 2020 was down a whopping 36.9% compared with October 2019. The information below is a total of all homes for sale, including single-family homes, townhomes and condominiums.
That’s good news for sellers today, who will face less competition from other homes on the market than sellers faced a year ago.
Median Sales Prices Are Soaring
The Median Sales Price for homes in the Greater Atlanta Area is up an astonishing amount (almost 20 percent) year-over-year as of the month of October 2020, versus October 2019. The chart below shows the median sales price out of all residential property types (single-family homes, townhomes and condominiums).
This massive increase shown in this chart may be partly due to the portion of homes for sale at higher price points in 2020 compared with prior years, rather than an increase from repeat sales of the same homes. The values of residential real estate properties are very closely tied to the specific characteristics of the individual properties and locations, so the median sales price shown in the chart doesn’t necessarily mean that your own Atlanta property value went up by 20%.
Residential property values are often determined by factors like supply and demand characteristics of their own neighborhood or similar ‘hyper-local’ areas, costs of borrowing money at a specific point in time, and very comparable properties in the same hyper-local areas, so it helps to have the expertise of a real estate agent for questions about your specific situation.
Fall colors in the Wildwood neighborhood
Key Takeaways
Now is an amazing time to buy or sell a home. Record low mortgage interest rates have increased buyers’ purchasing power. According to an August 2020 interview with Lawrence Yun, Chief Economist for the National Association of Realtors, a number of people who were happy with their homes and not even considering selling their properties as recently as recently as 2019, before the pandemic, are suddenly considering selling. These same people are now motivated to find another home with features that can better meets their current needs.
The home is more important than ever these days. Many of us are spending more time at home and are viewing it not just as a safe place to shelter ourselves and our families, but also as a place to work, to teach kids, to relax and to play.
With a growing number of companies allowing employees to work from home and with many considering plans going forward of possibly offering their employees a hybrid model - working some days a week from an office and others from home - the residential real estate market in Atlanta is hot. People are now looking for homes with extra rooms to use as an office or more outdoor space to play. This has created in today’s housing markets a new driver that Yun referred to as Secondary Housing Demand.
If you are considering buying or selling a home this year, there’s still time! Sherry Wren and I would be glad to listen to your needs and help you in your journey.
Note: This report was created by Matt Wren and is meant to be informative. The postings on this site are my own and don’t necessarily represent Harry Norman, REALTORS®’ positions, strategies, or opinions.
Data in charts is from First Multiple Listing Service only, and is believed to be accurate but is not warranted.
Data excludes off-market transactions or any transactions not listed in FMLS.
