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Today's Article In The AJC:  Atlanta's real estate market continues to cool due to high interest rates.  

Interest rates weighing on home sales
Metro Atlanta market ‘has really pulled back,’ real estate service says.
By Michael E. Kanell - michael.kanell@ajc.com
DIGGING DEEPER HOME SALES
The metro Atlanta housing market stumbled in September under the weight of the highest mortgage rates since 2000.
In the 12 counties centered on the city of Atlanta, there were 4,488 homes sold last month, down 16.7% from August and a drop of 21.8% from the same month a year earlier, according to the Georgia Multiple Listing Service.
“There has been a fairly significant drop-off from last year,”
John Ryan, chief marketing officer for Georgia MLS. “And now we are going into the usual seasonal decline.”
The total value of homes sold last month was $2.1 billion, a drop of 18.1% from a year ago. That means much less money for many people whose business depends on sales: brokers, lenders, appraisers, accountants and attorneys.
“We’ve seen a decrease in the number of appraisers,” Ryan said. “I think that is a sign that the market has really pulled back.”
The latest chill came as mortgage rates climbed again, he said. “I think 7% has been a demarcation line.”
Rates had crested above 7% last fall but have been
below that line from last November to mid-August.
The average 30-year mortgage rate last week was nearly 7.5%, the highest it has been since late 2000, according to Freddie Mac, which buys mortgages in the secondary market.
A year ago, the average rate was 6.6%. Two years ago, it was 2.99%.
Higher rates are a problem for homebuyers. As rates rise, they add to the amount due monthly for the same loan, effectively cutting the purchasing power of buyers. Faced with higher rates, some potential buyers lower their sights and search for less costly homes, while others stay put, hoping rates will drop.
But higher rates have also been a sticking point for owners who might sell.
Most current owners bought their homes when rates were much lower and would be trading them for higher rates if they move.
The result has been a small pool of inventory — that is, the listing of homes for sale.
In September, that pool was 10.2% smaller than it was a year ago, when it was already considered inadequate.
In a balanced market, experts say that supply should be roughly equal to six or seven months of sales, but listings now represent a little more than two months of sales.
And that has meant that wannabe buyers still confront a market that is tilted to the advantage of sellers.
“Despite rising mortgage rates, there are still many buyers out there actively looking,” said broker Kristen Jones, owner of Re/Max Around Atlanta. “We continue to see multiple-offer situations on many properties.”
So, while the overall chill in the market means prices aren’t climbing the way they were a year ago, the tilt toward sellers keeps prices from dropping. The median sales price for a home in the core 12-county area last month was $395,000, up 2.3% from a year earlier, according to Georgia MLS.
NUMBERS TO KNOW
16.7% The decrease in number of metro Atlanta home sales from August to September.
7.5% Average 30- year mortgage rate last week, highest since November 2000. Rates have continued to inch up this week.
$395,000 Median sales price for a metro Atlanta resale in September, up 2.3% from a year ago because of limited inventory on the market.

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Today's AJC Article covers the current malaise in the local market and echoes many trends I've been seeing.

With mortgage rates high, market leveling
Median price of home sold in August just 1% higher than in July.
By Michael E. Kanell - michael.kanell@ajc.com
CONTINUING COVERAGE HOUSING
With mortgage rates near 20-year highs and relatively few homes listed for sale, the Atlanta-area housing market in August reached something of a precarious — and possibly temporary — plateau with prices rising, but slowly.
The median price of a home sold last month was $404,000, according to data released this week by the Georgia Multiple Listing Service.
That was just 1% higher than in July and only 2.3% above the median price of a home sold a year earlier, compared to double-digit increases for previous years, said John Ryan, chief marketing officer of the Georgia MLS.
The dampener on price hikes has been mortgage rates, pushed higher by the Federal Reserve’s campaign to tame inflation by raising borrowing costs.
When that changes, the market will see a flood of buying, predicted broker Kristen Jones, owner of Re/Max Around Atlanta.
“Eventually, the Fed will stop, and mortgage rates will come down. At that point, we expect the floodgates to open.”
But right now, those gates are high and they’re holding.
The average rate for a 30-year mortgage was 7.18% at the end of August, the highest it has been since March 2002, according to the Federal Home Loan Mortgage Corp., which insures loans in secondary markets.
Many who do buy now are betting that can’t continue, Jones said. “Buyers crossing their fingers that they can refinance in the next few years.”
Higher rates not only make monthly payments dramatically higher for new buyers, they freeze many potential sellers who don’t want to trade their current low rates for a high rate if they move, Jones said. “Sellers are not motivated to list. About 61% of all outstanding mortgages have an interest rate below 4%.”
With so many potential sellers standing pat, inventory — that is, the number of homes listed for sale — was 12.1% lower in August than it was a year earlier, according to the Georgia MLS. Fewer than 11,000 homes in the region were listed for sale, which represents barely two months of sales. In a healthy, balanced market, the inventory level should represent at least six months of sales.
Part of the problem is an overall housing shortage in metro Atlanta.
After years of exuberant overbuilding, construction came to a virtual halt during the 2007-09 recession and has never regained its previous pace despite the region’s population growth. Since 2012, the shortage — and the flow of millennials into the market — has kept home prices rising, which increasingly made affordability an issue.
Then came the pandemic, which roiled expectations about commuting and home offices, and spurred federal efforts to protect household finances by driving interest rates down to historic lows and pumping money into the economy.
The rebound from the pandemic has meant rapid job growth, along with higher pay for many.
But at least until recently, Atlanta home price gains far outpaced income growth.
That made down-payments for homes a challenge, shoving many potential buyers out of the market.
Demand for housing has spurred construction, most of it well outside the city of Atlanta. Even so, high land prices and various zoning restrictions have made construction for first-time buyers rare.
In Alpharetta, Blue River Lifestyle Communities this week announced a 24-unit development that includes both townhomes and single-family houses. The homes will be listed at $1.3 million or more.
Nearly 80% of baby boomers own a home, but only about half of the nation’s millennials do, according to national brokerage Redfin.
About 1 of every 5 millennials say they don’t think they’ll ever be able to afford one, according to a Redfin poll.
But at least renters have also seen a moderation in the market. Metro Atlanta’s median rent is $2,127 a month, according to Rent. com, which tracks rentals nationally. That is virtually unchanged from a year ago, the group said.
And rate hikes are also biting homeowners who stay put.
The Fed’s campaign ripples through to virtually all borrowing, from car loans to credit cards. So even homeowners with low-rate mortgages will pay more than before if they want to tap their mortgage for a loan, said Andy Walden, vice president of research at Black Knight, a real estate analysis firm recently purchased by Atlanta-based Intercontinental Exchange.
Nationally, mortgage holders withdrew $39 billion in equity from their homes in the second quarter of this year, which is only about half as much as before interest rates started to climb, he said. “Rising rates are having a clear impact on how — and how much — equity mortgage holders are willing to withdraw from their homes.”
MORE DETAILS
METRO ATLANTA HOUSING MARKET, AUGUST
¦ Median sales price: $404,000
¦ Number of sales: 5,299
¦ Number of homes listed for sale: 10,927
¦ Price compared to year earlier: up 2.3%
¦ Sales compared to year earlier: down 15.8%
¦ Price compared to January 2020: up 50%
AVERAGE RATE, 30-YEAR, FIXED-RATE MORTGAGE
¦ Aug. 31, 2023: 7.18%
¦ Aug. 31, 2022: 5.66%
¦ Aug. 31, 2021: 2.87%
¦ Aug. 31, 2020: 2.91%
¦ High since 1999: 8.64% (May 2000)
¦ Last time above 7%: March 29, 2002
Source: Georgia Multiple Listing Service, S&P Case Shiller Index, Federal Home Loan Mortgage Corp.

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we're the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading!