It seems to be a strange time right now for housing. Inventory was tight last year and no one could find what they were looking for.
The funny thing is, I’m still hearing that comment from buyers and other agents alike, but it’s not quite accurate.
Inventory in metro Atlanta is up 24 percent versus last year, 19 percent in North Atlanta. The problem now isn’t lack of inventory, what we’re finding from our buyers is lack of quality inventory.
Buyers have changed their perspective from last year.
Home values went on a steep rise and sellers have taken that as a signal to get as much as they can. Who can blame them.
After the extended recession and brutal beating everyone took over the previous 5 years, recovery was just what the doctor ordered.
But buyers aren’t biting and demand has softened. Even new home builders, who jumped on the rising prices bandwagon, are beginning to offer incentives.
In our experience, a buyer will wait longer or broaden their search area to find the right home before they pursue a home at top dollar that doesn’t offer top condition or location.
This is why we’re seeing lower sales numbers overall. In metro Atlanta the number of homes sold in May is down 8 percent from the same time last year, despite inventory being up 24 percent
Are we headed for another correction?
The short answer is no.
Despite rising prices we’re still off from our peaks in most areas by approximately 6 percent. Through the rest of this year inventory will continue to rise modestly, demand is likely to remain soft and prices will not rise at the rates they have over the past months, in fact we’re seeing that now.
A sellers’ challenge is not simply one of pricing, it is more about a sales strategy in their hyper-local market. Buyer demand isn’t dead, they will pay up if it’s what they want. Sellers need to understand what they want.