January Intown Market Report
By Bill Adams, President
The Average Sales Price for the overall market in this month’s report is $794,289, a 9% increase in the last year. The Number of Days on the Market increased to 41 days and the Number of Units Sold is 1,413 houses. The Total Sales Volume for the market increased by 1% to $1,122,330,530. Each year I look forward to the January report because it is the only survey that compares three calendar years. As I have stated in the past, these reports are based on the last 12 months of data (the Trailing 12) and the other eleven reports include parts of years. As an example, the December report included data from 2021, 2022, 2023 and 2024.
The numbers over the last three years tell the story of the single family residential real estate market in Intown Atlanta. Sales prices are continuing to increase, it is taking longer to sell a property, and the number of transactions has fallen. The chart below compares the years 2022, 2023 and 2024.
These numbers show in dramatic fashion how the Intown Atlanta market has changed over the last three years. The Average Sales Price (ASP) is up over $100,000 since 2022. In 2022 the ASP was approaching $700,000 and now it is nearing $800,000. It took an average of 13 days longer to sell a house in 2024 than it did in 2022. The number of transactions is down by 577 when you compare sales in 2024 with sales in 2022. The increase in time to sell a property jumped significantly in 2023 along with the decline in transactions.
So, what does my “crystal ball” predict for the 2025 Intown Atlanta market?
The supply of single family detached houses for sale will remain constrained. Part of the problem is geography, most intown neighborhoods are built out with little land available for new construction. Baby boomers like me are part of the problem. Most of us are happy with our homes and do not want to downsize into an apartment or condominium. Finally, there are many homeowners who have home mortgage interest rates in the 2% to 4% range that do not want to give up those great interest rates. Thus, it’s easy to predict that the supply will stay tight and the resulting upward pressure on house prices will continue in 2025.
While, as I write this in mid-January, interest rates are going up, I believe the rates will drift downward as we move further into the year. As I have said in the past, if mortgage rates fall below 6% the folks with the low interest rates on their homes will jump into the market as sellers, increasing the housing supply. Interest rates below 6% will make housing more affordable and may attract more first-time buyers into the market. Finally, after almost three years of high mortgage rates many buyers have come to the realization that the “good old days” of sub 4% interest rates may be gone for good and it’s best to adapt to higher interest rates.
For 2025, I predict that interest rates will make it down to the low 6% range. The number of transactions will increase from the 2024 low point by at least 10% and the days on the market will fall back into the 30s. I expect that Intown Atlanta house prices will increase by at least 5% and probably closer to 10%.
Postscript- It is all a matter of perspective. In 1983 I purchased a home in Grant Park for $35,000. I was quoted an interest rate of 17 ½% on a 30-year fixed rate loan by a lender. Instead, I opted for a new loan product called an Adjustable-Rate Mortgage for 13%. The early 1980s was a time of high interest rates. Those high rates were offset by low house prices.
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