Atlanta MSA Home Price Forecast through 2021 Pent-up demand, historically low interest rates, and below average inventory has led to home price increases between May and June of nearly one percent. Listing vol - ume has increased as sellers gain confidence in home values and their ability to find a replacement home, but for-sale listings are still down by nearly 15 percent YoY. Coming into 2020, the Atlanta SFR market has been steadily per- forming, supported by the robust economy creating new jobs and wage increases. Prices will remain supported in the near term due to reduced inventory, historically low mortgage interest rates, seasonal demand, and the improving buy- er sentiment from reopening the economy. Conversely, new outbreaks of the virus in July have caused Atlanta’s mayor to recently roll back the city to Phase One of the reopening mandate. Continued restrictions threaten to stagnate the economy again and create uncertainty for potential buyers. After the initial Rental Rates As of May 2020, the average three-bedroom, SFR home in the Atlanta MSA is $1,460/mo. Metro area one-year change for a three-bedroom detached SFR is up 6.1 percent, which is an $85 annual increase. Rents for single-family homes have rap- idly appreciated 33 percent over the last five years, 6.1 percent year over year, and have come up another 1.8 percent between April and May 2020.
Demand will continue to shift towards the suburbs which will support current prices, while more densely populated areas will see less demand and price reductions. Q4 2020 - Q1 2021 Forecast: -8% to -2% Spring/Summer of 2021 should show improvement. A vaccine may not be widely available, but public awareness and precautions will help keep cases under control for the economy and employment to build. Wages will stay flat or decrease slightly as the economy ramps up. Mortgage interest rates will stay low through next year, and any dip in prices should encourage renewed demand for homebuyers and investors. Demand will stay elevated in the suburban areas which will help increase prices, while demand in the more populous areas will be muted leading to flat or marginal price growth. Q2-Q4 2021 Forecast: +0% to +5% Disclaimer: The variability around this forecast is wide and dependent upon data available as of June 2020. The severity and duration of the COVID-19 epidemic, as well as the response of the public and policymakers, continues to change daily.
surge of buyers in early summer, demand will begin to decrease due to attrition, increased qualifications for loan approval, employment un- certainty, and reduction in wages. We forecast supply-and-demand to be evenly balanced in the sum- mer months, leading to flat or moderate price growth. Q3 2020 Forecast: +0% to +2% Heading into winter of 2020/21 – Medical professionals continue to warn of a further resurgence in cases in the fall-winter flu-season period, which could restrict the economy and damper consumer sentiment further. Those who do not qualify for a forbearance exten- sion or loan-mod may affect prices by adding inventory at discounted prices. The tighter lending restrictions, a slow recovery for the job market, seasonal slowing of market de- mand, and increasing defaults from non-GSE loans are challenges that will weigh on real estate prices. Buyers and investors will be ex- pecting to find deals at a discount, and this sentiment will put down- ward pressure on prices.
Current Rent Price
Yields
Current Home Price
© 2020 Mapbox © OpenStreetMap
© 2020 Mapbox © OpenStreetMap
© 2020 Mapbox © OpenStreetMap
3Bd SFR Rental Price
SFR Home Price
Avg Yield
$1,200
$1,800
$150,000
$400,000
8.0%
13.0%
88 | think realty magazine :: september 2020
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