Greater Atlanta’s Residential Real Estate Market: 2020 Review & 2021 Predictions
Wednesday, January 6th, 2021
Contrary to the expectations of many, greater Atlanta’s residential real estate market performed extremely well during 2020, according to Kelly Stephens, managing broker at Engel & Völkers Buckhead Atlanta and Engel & Völkers Atlanta North Fulton.
“For the first time ever, it looks like home sales in 14 metro Atlanta counties will top 100,000 for the year, based on end-of-November reports from FMLS (First Multiple Listing Service). As of Nov. 30, 2020, FMLS reported 92,023 closings to date for detached and attached homes. December currently shows a potential of another 9,536 closings for this final month of the year; pushing Atlanta into territory never expected when we realized the pandemic would be affecting us all for most of 2020!”
To give these numbers some historical perspective: According to FMLS, the greater Atlanta market closed 64,252 homes in 2013. There was strong growth from 2014 through 2016, as those years saw between 10.5-14.3% increase each year in unit volume. If the numbers turn up for 2020 as expected, that will be a 10.12% increase over 2019, versus the more “normal” increase for Atlanta of 1-4% year-over-year.
“There are many factors influencing this year’s home buyers. As people shifted from working in offices to working from home, many realized their current homes no longer suit their needs. Home offices, outdoor living spaces and larger yards have all become sought-after features. Because remote working is probably here to stay – at least some of the time for some of the working population -- home seekers looked for houses in areas where they wanted to live, versus areas close to their offices. As the desire to move increased, buyers were buoyed by extremely favorable mortgage interest rates. When mortgage restrictions loosen, as they did coming out of the mortgage crisis, then more people can opt for home ownership. This year we have seen historically low interest rates and despite the pandemic, people capitalized on that buying power,” said Stephens.
Freddie Mac's nationwide survey of mortgage rates showed the 2020 average on a 30-year mortgage was 2.98 percent, the first time this key rate has fallen below 3 percent since the government-backed mortgage finance firm began publishing the data in 1971.
“At Engel & Völkers Buckhead Atlanta and Engel & Völkers Atlanta North Fulton, we anticipate residential real estate in the metro area will continue to have strong growth through 2021. We have heard from lenders that they don't expect much upward movement in the interest rates. We have seen that building permit requests are up for new construction; even hitting a 28% increase some months. These factors, coupled together, make a city like Atlanta very attractive to homebuyers. Not to mention, we have a very diverse labor force, low unemployment, great weather conditions, very affordable housing compared to other metropolitan areas, and we have the busiest airport in the world,” said Stephens.