This has been a great year for the Georgia real estate industry. Prices throughout metro Atlanta are up and Better Homes and Gardens Real Estate Metro Brokers has more top producers than ever before. In some areas, the median sales price has met and exceeded pre-recession levels. This was another rebuilding year, but there’s still a lot farther our market has to go to truly recover.
Consumer confidence continues to be down, causing pent-up demand for housing, which has led to low inventory in important price points. In particular, first-time buyers will need to come out of the woodwork. In an optimal housing market, first-time homebuyers make up around 40% of the market. Currently, they are hovering around the 20% mark, which has caused the number of home sales to drop considerably.
Due to the rapid increase in the rental market and extremely low interest rates, choosing to purchase a home is more affordable than renting throughout metro Atlanta. So why aren’t more first-time homebuyers entering the market? While the job market is heating up, I feel that many Generation Y and Millennials who would be candidates for buying a home might have a job, but aren’t necessarily in their chosen profession. Plus, the overwhelming debt caused by student loans and the recent recession have soured the younger generations on taking on a home loan.
While the first-time move-up segment is growing, it would be much healthier if more first-time homebuyers were entering the market. Also, the luxury home market has grown by leaps and bounds, especially in the resale segment. With home prices gaining, more homeowners are seeing the equity in their home grow and new home building is starting to catch on in some areas.
What do I see for 2015? Metro Atlanta will continue to grow. This year, we had a large uptick in transferees to Georgia, and we’ll see that persist as more large businesses choose metro Atlanta as its headquarters and important trades – like the film industry – continue to flourish. In addition, we’re likely to see a slight increase and then stabilization in home values. Finally, unemployment will continue to drop and the market will strengthen.
As we move into 2015, it’s going to be important to educate millennials on the gratification and investment opportunities of owning vs. renting. It’s also essential that we continue to move first-time move-up buyers towards their dream of a better home. With the New Year on the horizon, I couldn’t be more excited for what 2015 has in store for our industry.