St. Bourke, an Atlanta-based asset management and property development company, offers its 2022 Year in Review Atlanta market report.

“Activity across Atlanta’s housing market in 2022 largely reflected the nationwide slowdown over the past 12 months as high home prices, construction costs and mortgage rates further eroded affordability and disqualified many homebuyers,” St. Bourke’s Director of Research & Communications Katie Fidler said. “However, despite major fluctuations in the national economy, Atlanta remained relatively insulated from the economic impacts felt in other major metro areas.”

The Federal Reserve Bank of Atlanta officially deemed the Atlanta housing market unaffordable in early 2022. Prices continued to climb throughout the year as the inventory decline outpaced the decline in demand.

Key takeaways from the Atlanta report:

Mortgage Rates – Current mortgage rates are responding to decreasing inflation and have declined steadily since peaking in early November 2022. 

Home Supply – The supply of available homes in the metro Atlanta area is still critically low, with only 2.1 months of supply. While this represents a slight improvement over 2021 levels, this is still -30% below levels seen before the onset of the pandemic in 2020.

Housing Starts – Total housing starts activity is down from post-pandemic highs. Attached housing starts (townhomes) are faring better -- down year-over-year but still +9% above pre-pandemic levels. With 20 of 23 counties showing declines in year-over-year home starts, only Dawson, Fayette, and Jackson posted gains. Interestingly, these are all exurbs.  

New Home Closings – New home closings are down from post-pandemic highs but still well above pre-pandemic levels. 17 of 23 counties had year-over-year declines in new home closings, the exceptions again coming from exurbs like Jackson and Barrow counties.

Lot Deliveries – Lot deliveries in Atlanta were flat year-over-year. The vast majority of lots in production were started before housing market began rapidly cooling in mid-2022. Year-over-year increases in lot deliveries were seen in 12 of 23 counties. St. Bourke predicts a delayed slowdown in development in 12 months. 

Home Prices – The $400,000 range became the dominant price range for the first time in Atlanta's history. There was a -44% decline in new homes sold below $400,000 and a +56% increase in homes sold for more than $400,000 during 2022.

Housing Affordability – Based on median income, the typical Atlanta household can only afford a $285,000 home (assuming a 5% down and a 6.5% interest rate).

Top Communities – Hoschton's Twin Lakes was once again Atlanta's top-selling community for the second year in a row. 

• 2021 total sales: 346
• 2022 total sales: 288 (-17% - a good illustration of declining demand)

Popularity of Townhomes – Four of the top 10 performing communities in 2022 feature TH product, increasingly popular product option from a $ standpoint (for both builders and buyers)

Building Farther Out – Six of the top 10 performing communities in 2022 were more than 30 miles from the urban core. Toward the end of the year, this trend began shifting back toward the city with a plethora of infill townhome projects.

Community Starts Versus Close Outs – There is a vast imbalance between new communities started and closed out, with a negative net of -341 communities in 2022 alone.

Top Home Builders – D.R. Horton is still running the table on everyone, but Starlight/Ashton Woods, Dan Ryan Builders, and Meritage made serious (upward) moves in 2022.

“Given increasing affordability concerns across the Metro area, we would have expected homebuilders hitting the entry-level price points to outperform their higher-priced competitors, but that’s not what we saw play out over the last 12 months. The handful of Atlanta builders that managed to increase their market share in 2022 averaged sale prices in the mid- to upper-$400,000s,” said Fidler. “What that tells us is that high home prices and increasing mortgage rates are having a disproportionate impact on first time and first move up homebuyers, which is why we saw homebuilders focusing on these buyer segments struggle in 2022. On the other side, homebuilders who focus on less price-sensitive buyers were far less impacted in terms of sales and absorption over that same period.”

St. Bourke predicts that 2023 will be remembered as a pivot point in the story of the national economy, with the first several months of the year providing a solid indication of the path ahead. Positive indicators showing the return of demand and production rebound from investors and homebuilding clients have already started. The St. Bourke team is optimistic that the Federal government's inflation-fighting measures will continue to produce positive results, and the employment impacts will remain relatively limited and isolated within specific sectors of the economy. 

"We feel reasonably confident that the Atlanta housing marketing will benefit from the significant level of pent-up demand once mortgage rates return to more palatable levels," comments Fidler. 

The 2022 Q4 National Housing Market and 2022 Year in Review Atlanta Market reports are available to view/download on the St. Bourke website - https://www.stbourke.com/market-reports.