Bad news for both metro Atlanta home buyers and renters

Having a positive attitude in business is important, especially in the real estate business. Between an offer and a closing, there’s a lot that can go wrong.  

But pessimism seems to always make things worse. And unfortunately, FOX 5's real estate expert John Adams has a sobering message for all renters and prospective buyers in the near future.

1. Demand for homes (for sale and for rent) greatly exceeds supply

New construction has failed to keep up with demand for a variety of reasons, so fewer existing owners are able to buy a new home when they wish.  As a consequence, they don’t move and sell their old house. In the meantime, millennials are forming families and wanting to buy, but there’s just not much for sale today.

2. Inflation means higher interest rates and fewer buyers

Inflation is here. That means higher interest rates and fewer qualified buyers. And now inflation has hit everything from lumber to steel, and there are simply no signs on the horizon of lower prices in the next year.

3. All-cash investors make matters worse

According to a recent report from CoreLogic, investors account for nearly 26% of all US single-family home purchases. But Atlanta has proved especially popular with investors and iBuying ventures. In metro Atlanta, the investor share of single-family homes is currently 43%, a staggering figure. These investors pay with cash and make it harder for owner-occupant buyers to compete. Many first-time buyers have simply given up looking and are resigned to renting.

4. No relief anytime in the next year

And here’s the worst part: Adams sees no relief in sight at least through the end of this new year. The Federal Reserve has promised to raise interest rates soon in an effort to slow inflation. Adams is looking for the rise in home prices to slow from its pace in 2021, but there is simply no reason to think housing costs will decline, in fact, just the opposite is the case.

Prices will go up this year, both for sale and for rent, so get used to the idea. 

The bottom line is, as far as the housing market is concerned, Adams can’t find a silver lining on this thundercloud. It’s going to be a tough year to buy a house, and maybe even tougher to find a bargain rental.