By Bill Adams, MBA, CCIM, ALC, CRB, Founder, Adams Realtors
The data in the following December 2022 report covers transactions during the 12-month period from December 1, 2021, through November 30, 2022. The Average Sales Price for the 39 Atlanta markets in our survey comes to $689,589, which is an increase of 12% over last December’s report and an increase of .0079% over the past month. This last number, when annualized, equals 9.48%, which indicates a decline in the rate of increase in the Average Sales Price over previous years.
The Number of Days on the market remains unchanged at an average of 27 days, with more than 2,069 properties sold over the past year. This is a decline of 440 units from December 2021 and 533 units from December 2020.
In my opinion, the decline indicates both reduced demand due to higher interest rates in the last half of this year and continued limited inventory of homes for sale.
I feel strongly that owning real estate is a good hedge against inflation. The latest figures peg inflation at 7.1%. Most of the intown markets that make up this report experienced year-over-year increases in Average Sales Price more than the current inflation rate. Only Cabbagetown, with a 5% decrease in Average Sales Price, Lenox Place with a 6% increase and Reynoldstown with a 2% increase were below the rate of inflation. Both Morningside and West End mirrored the inflation figure with a price increase of 7% each. Most of the intown markets had double digit increases in Average Sales Price with the top five markets this month being Poncey-Highland at 45%, Winnona Park at 31%, Hapeville at 29%, Oakland City & Oakhurst at 28% and both Peoplestown and Kirkwood having a 27% increase in Average Sales Price.
I expect as we move into 2023 the rate of increase in the Average Sales Price will decline over the first six months of the new year. I do not anticipate home prices falling and at worse they may plateau for several months. I predict that the rate of inflation will decline and the decrease in inflation will result in lower home mortgage interest rates by mid-year 2023. Those lower interest rates will again drive demand for housing and, without any significant increase in the supply of single-family homes, cause prices to increase.
