East Cobb Real Estate Outlook Harry Norman Realtors

East Cobb Real Estate Outlook: Harry Norman Realtors

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East Cobb real estate outlook

With the current economic and real estate volatility, East Cobb News is reaching out to local experts to gauge the state of the East Cobb residential market.

We submitted the following questions in bold to the East Cobb office of Harry Norman Realtors (4651 Olde Towne Parkway), and the responses are in regular type. They have been lightly edited for style and punctuation.

We will be conducting similar updates with other East Cobb realtors and real estate agencies in the coming weeks.

Q. How would you describe the state of the local real estate market now, focusing on the East Cobb area?

A. We are seeing a slight uptick in the number of listings that have come on the market in our area. We were so low in inventory at the beginning of the year, that the slight uptick is noticeable. This is seen in homes being on the market for a longer period of time and price reductions.

I believe higher interest rates and so many people taking a vacation this summer (when they didn’t go on as many trips the last two summers) have directly impacted our market here locally and caused the slow down of how fast homes sell. I believe the price reductions are a sign of ambitious sellers, not depreciation.

In fact, we are still anticipating close to 8-9 percent appreciation year over year. To give you a comparison, the 2021 appreciation year over year was nearly 20 percent in our area but 3-5 percent is a historically “healthy” rate of appreciation.

Q. What is different about this current situation compared to the recession?

A. The recession/financial crisis of 2008-2013 created a situation where many builders and trades people ultimately had to get out of the building industry all together. Because of the financial crisis, the nation experienced an under-supply of homes being built for 14 years since there was such low demand.

Now, younger Millennials and the oldest of the Generation Z, which is a very large population section, are in their prime home buying years. They are also the first generation that has had parents and grandparents offer inheritance money to help with their purchases instead of saving that money to give to them in their wills. This has helped fund more cash purchases and helping buyers out-bid one another.

Q. What are your projections for interest rates in the short, intermediate and long run? 

A. We will likely see interest rates rise in the near term to control inflation and then once that is under control, the Fed will drop them to help the economy come out of the recession. I’ve seen projections from experts for the later part of 2022 and in to 2023 to be in the 5-6 percent range. 

Q. How did the metro Atlanta market become one of the most overpriced housing markets in the country and what has contributed to that?

A. Median home prices in metro Atlanta hit an all-time high of $400,000. We are still considered quite affordable in comparison to other metro areas around the nation and that is what has continued to attract businesses to relocate or open new offices here. Prices that buyers are paying for homes in today’s market are a function of buyer demand and seller supply.

Q. How much is the local market cooling, and do you think there will be a steeper decline or even a crash?

A. Our local market is showing signs of being right in line with 2019, a fabulous year in real estate in our market and in the nation. The years 2020 and 2021 just happen to have been abnormal markets that took off to a supersonic speed. I think we are now back to turbo jet speed.

For a crash to happen, we would have to have a very sharp increase in listings and a very sharp decrease in buyer demand all in a very short period of time. I don’t expect either of those, especially because of the current migration patterns to Atlanta and the Millennials being at their prime home buying years.

Q. What key factors should both buyers and sellers be looking for and how should they be preparing for the coming months?

A. In 2021 and in early 2022, buyers were battling it out with many other buyers in competition for very few homes on the market or before they hit the market. Buyers that “won” multiple offers tended to bid significantly more than the house was priced and did not put many, if any, contingencies in the contract to protect themselves.

Right now, there are still multiple offers on well-priced homes in good condition but there aren’t as many so buyers tend not to have to spend quite as much over list price or remove all of their contingencies to be competitive.

Sellers should be advised that there is still strong buyer demand, but they are looking for homes that are not over-priced and are in tip-top condition. If their home does not meet premium conditions, sellers may see their home sit on the market for a longer period of time before garnering an offer. In this shifting market a well versed and experienced agent can make a big difference on the outcome.

As a buyer you want someone who truly understands where the market is headed so that you don’t overpay based on the recent heated market. And as a seller, you need an agent that knows how to create demand to maximize your return.

Q. What other trends about the local market bear watching through the end of this year and into 2023?

A. I believe seasonality is back in the market. We will likely see more and more listings come on the market throughout the end of this year and I expect to see a strong spring market once again as we historically have. With our community and schools being in high demand, our market tends to revolve around parents making decisions in step with the school calendar. I also anticipate the continued relocation of businesses in to the Atlanta area to impact buyer demand in our area.

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