The Georgia Bulldawgs football team extended our holiday celebrations past New Year by earning a spot in the National Championship game in Los Angeles. We watched the game from the HD section in our living room and the victory was sweet. Our routines are just now getting back to a more normal rhythm. So finally, I am ready to share my predictions for the 2023 Atlanta Housing Market.
- Is it going to be a Buyers’ Market in 2023? Heck no. It is neither going to be a Buyer’s market nor a Seller’s Market. It is going to be a “Nobody’s Market” to borrow one economist’s analysis. I predict we will see a relatively balanced market between buyers and sellers in Atlanta. Home prices won’t change much (more on that below) and interest rates wont change much (though they might moderate slightly depending on the Fed’s actions). It is likely to be a pretty humdrum market.
- What about the market crash some people are talking about? That’s not likely to happen in Atlanta for a couple of reasons. Number one is the continued job growth the Atlanta market continues to experience. If folks have a job they can afford to pay their monthly mortgage payment. Number two is that most homeowners have significant equity in their homes after the increase in values in 2022 AND they have affordable house payments because they financed their homes when mortgage rates were in the 3-4% range. There is no housing bubble in Atlanta.
- Will there be a recession in 2023? Some economists are predicting a mild recession in 2023 but if it happens it won’t be based on unsold housing inventory like it was in 2008. Housing inventory is LOW in Atlanta and it is unlikely we will see a lot of foreclosures in 2023 because of Atlanta’s strong jobs market. And once again – homeowners have built up a lot of equity in their homes because of the value increases in 2021 and 2022. Fannie Mae expects the housing market to continue to slow even though mortgage rates have eased slightly. But we are a long way from the economic conditions that caused a recession in 2008. THERE IS NO HOUSING BUBBLE.IN ATLANTA.
- What will mortgage rates do in 2023? Last January mortgage rates were around 3.2 %. The 30-year fixed mortgage rate topped out higher than 7 percent in October for the first time in more than two decades. Rates have declined slightly since that time. Most economists predict a slight decline in interest rates in 2023 if the Fed continues its inflation-busting plan. The consensus is mortgage rates in the 5 to 6 % range for 30-year mortgages. It won’t be a significant change and I recommend buying when you need a home and not waiting for the ”best” mortgage rate. Most Home Buyers are likely to base decisions on need rather than an opportunity created by market conditions.
- Do you expect more or fewer home sales in Atlanta in 2023 compared to 2022? My expectations are pretty low for a return to a vigorous housing market in Atlanta in 2023. Homes will be listed for sale for the usual reasons: career changes, family growth, death and divorce. But I expect a rather normal housing turnover in 2023. Again Home Buyers bought homes earlier than they planned because the interest rates were so danged low. It’s back to a more normal in market 2023 and an actual housing need will drive sales – not opportunity. Families needing a better school district or more bedrooms or an in-law suite for elderly parents will drive the market. Even downsizing will have a role to play. But buyers are not gonna come out of the woodwork because mortgage interest rates make buying a little more painful than in 2021 and 2022. Housing inventory levels will stay about the same as they are now – which is historically low for Atlanta. I am hoping the spring market will bring out more home sellers but that remains to be seen.
- Are home prices in Atlanta going up in 2023? Don’t expect much fluctuation in price for Atlanta homes in 2023. There may be a slight increase in home values but the market will be pretty humdrum in 2023. High home prices and mortgage rates limit what First-time Homebuyers can do and that is what drives the market. It’s a chain reaction as lower priced homes sell and then the seller “move-up” to a home of higher price and larger size. I just don’t see any economic conditions that would drive that First-time Homebuyer market in 2023. Some intown markets will continue to experience home value gains because the opportunities are limited for Buyers who want to live in that market. But in the suburbs new construction, though dampened, will continue to meet any excess demand and keep housing values close to where they are now. Prices will remain flat. I expect new listings to continue declining through most of next year, keeping inventory low for Atlanta and this will keep home prices from dropping.
- What’s happening in the real estate brokerage industry? A lot! National brokerages like Compass and Redfin have been slashing office staff because they lost so much money in 2022. We are seeing some local real estate agents leave the business because they just did not make enough money to live on in 2022. So there are going to be fewer professional real estate agents to service home buyers and home sellers in 2023. AND this comes at a time when home sellers especially are going to need more advice and guidance in navigating the market when it comes time to sell their homes. The investors have run for cover after they lost hundreds of millions of dollars buying homes directly from sellers and then trying to flip them for a profit. Zillow got completely out of the home-buying business. OpenDoor has retrenched and is trying to find a business model that works – they are not aggressive in buying homes right now. So if you need to sell your home in this transitional market, you will need to find an experienced professional to guide you through the process.
- Will UGA repeat as National Champions in 2023? Without Stetson Bennett IV guiding the team I think the chances for a repeat are likely less probable next year. I will continue to cheer them on. I can predict better chances for Georgia Tech football in 2023. Coach Brent Key was an excellent hire and he has signed on a stellar coaching staff that will put players first. I admire his achievements thus far and predict the team will greatly improve the won-loss record in years to come. Go Bees. As for my alma mater Vanderbilt – we always look forward to the next football season. Any improvement is appreciated as we are faithful Dores.