Despite the pandemic upending lives and businesses, one sector that has remained remarkably strong is the residential real estate market.
The median list price for homes in the city increased, inventory decreased, and sellers saw their properties in bidding wars and snapped up by interested buyers in days. Local real estate professionals said that trend is set to continue in 2021 as Intown’s neighborhoods – especially those along the Atlanta BeltLine corridor – continue to attract buyers.
Another Record Setting Year Ahead
“I think an unexpected result of 2020 was the strength of the residential real estate market despite the other challenges we all faced,” said Joy Myrick, a Realtor with Atlanta Fine Homes Sotheby’s International Realty. “The median list price of Metro Atlanta homes rose in the range of 8-9% year over year, while the inventory in some Intown neighborhoods decreased around 26%. Average days on market for desirable Intown areas was down 37% to just 15 days.”
Myrick said Metro Atlanta’s growth this year has had a huge impact on real estate and pricing. Many experts point out the fact that the cost of living in Atlanta is reasonable when compared to other big cities like Los Angeles or New York, which was a catalyst in the influx of new residents purchasing homes in 2020.
“All indicators point to another record-setting year in Atlanta real estate,” Myrick said. “We expect more homes will be listed, however after five years of limited home availability, it will take a while for inventory to rebound. While Metro Atlanta is predicted to see one of the steepest rises in home pricing next year (projected price growth is at 6.7% for 2021), historically low interest rates will continue to incentivize buyers to purchase. With the anticipated quick vaccine rollout, we could see sales numbers reach even higher levels than expected.”
Myrick said home demand remains strong to be near the Beltline, Piedmont Park and in walkable areas such as Morningside and Virginia Highland. Many buyers desire these neighborhoods, lined with sidewalks and front porches in order to connect with their neighbors outside. The short commute time has become less important to buyers, but the neighborhoods remain popular for their biking paths, pocket parks and restaurants offering patio dining and takeout windows, Myrick said.
“We are seeing new development in Piedmont Heights and the Cheshire Bridge corridor which is often slightly more affordable while offering the same amenities,” Myrick commented.
Myrick recommended that Intown buyers be pre-qualified by a reputable lender and be ready to make an offer quickly. Many homes are selling before hitting the market or in the first few days on the market with multiple offers.
Bigger Lots, Outdoor Living
Stephanie Marinac and Harvin Greene, Realtors with Dorsey Alston, said they were initially concerned about the health of the real estate market last spring when Intown was in lockdown, but those fears were unfounded.
“In some ways, it’s hard to believe given the uncertainty surrounding the economic impacts of the global pandemic and the temporary slowdown that is often associated with a presidential election,” Marinac said. “Using data from the multiple listing service, our calculations indicate growth in all measures—units up 3.3%, total sales volume up 9.4%, and average sales price up 6% in the Intown market compared to 2019.”
Greene said tight inventory remains tight, resulting in a decrease in days on market (down 8%) over 2019. She said typical seasonality spikes were upended because of the pandemic, resulting in a slower spring market, but replaced with a robust summer and fall market, with barely a slowdown heading into the typically slower holiday season. Specifically, the 2020 market was particularly strong in the entry-level price point ($700,000 and lower) and the luxury market ($2 million and up), Greene said.
“We expect that 2021 will continue to bring a strong real estate market in Atlanta, specifically in the Intown neighborhoods,” Greene said. “We expect that the positive news about the delivery of COVID-19 vaccines and the rapid delivery will create consumer confidence, which will continue to fuel real estate sales in 2021.”
Marinac said people spent an unprecedented amount of time in their homes—working, attending online school, or just enjoying more leisure time – during 2020. The result has been buyers deciding that they need or want different features from their homes. In some cases, people have determined that they need more space because they foresee that they will continue to work from home more, even after the pandemic resolves, Marinac said.
“Another result is that we’ve seen a shift toward buyers wanting bigger lots and a much greater emphasis on outdoor living and entertaining,” Marinac said. “Pools, specifically, have been an even bigger attraction in 2020, and we expect that trend to continue in 2021. We have also seen a significant migration to Atlanta from higher-density markets, like New York and Los Angeles, likely related to COVID, but people seem to be flocking to markets where housing is affordable and it’s easy to find a home with land and outdoor entertaining spaces.”
Greene said Druid Hills, which she believe has been somewhat undervalued compared to adjacent neighborhoods, has seen a particular spike in desirability and an associated average price increase of 25% in 2020 compared to 2019, and a 35% average price increase in the past five years. Morningside and Virginia Highland continue to be in high demand, as evidenced by their average price increases of 33% and 26% in the past five years, respectively. She said the Atlanta BeltLine continues to be a driver for real estate growth in residential home demand and prices.
Marinac and Greene encouraged buyers to not be afraid to look at a house that has been on the market for a while.
“We have seen an attitude among buyers that if a house is on the market longer than a couple of weeks that there must be something wrong with it, but that is often not the case,” Marinac commented. “Keep an open mind and even consider what effect minor cosmetic changes can have on a house. You may find the hidden gem you’re searching for. Our advice to sellers is to take advantage of the strong market, and if you’re considering selling – don’t delay. There is high demand and low supply for Intown housing, so jump on the opportunity.”
Demand Greater Than Supply
Carolyn Calloway, Senior Marketing Consultant with Harry Norman Realtors, Buckhead
agreed that the spring slowdown in the market was short-lived.
“When the market did quickly bounce back, it not only made up for lost time, but it continues to be an active market driven by historically low interest rates and low inventory,” Calloway stated. “Demand for homes is greater than the supply, which is resulting in sellers receiving multiple offers, often selling over the list price.”
Calloway said because of the competitive market, buyers are experiencing longer buying cycles.
“A lot of buyers miss out on the first home they want and have to restart the process,” she said. “This means that the number of showings for homes is high as more and more people are enjoying the convenience of a virtual tour.”
Calloway said the pandemic has somewhat changed what people are looking for, with a growing demand for multigenerational homes.
“People want to be able to share their home with their older parents or college children under the safety of their own roof,” she said. “Buyers are seeking not just more space, but more rooms. This is the reverse of the open plan we have seen for the last few years…people want walls, and now are looking for individual spaces for office, gym, school, etc.”
She said buyers at the higher end of the market are looking to invest money in making their home a sanctuary. Instead of traveling to a resort, the resort comes to them. Home gyms, home theatre, swimming pools, and outdoor kitchens are in high demand.
Virginia Highland, Morningside, Ansley Park, and homes near Piedmont Park and the Beltline remain some of the most sought-after areas of Intown.