There are two great reasons why prices
won’t fall anytime soon.

I want to tell you a story. It began in January of this year when many people thought prices would crash in metro Atlanta. I want to update you on that story because we've entered a new chapter. So what is going on, and when will prices start falling? My answer to that is they probably aren't. And there are a couple of reasons why.

The first reason is supply. We are still sitting at under two months of inventory, which means that if nothing else lists, it will only take 1.9 months to sell everything. Also, even though inventory is up, it's still down 55% from March 2020, as the pandemic was really taking off. Even though the data says we have a little more, it doesn't feel like it.

The second reason is 16 to 1. What does that mean? The median number of buyers that came through before the home went under contract in March was 16. You don't need more than a couple to start driving the price up. But when you have 16, which is actually five less than last March, you're definitely going to see bidding wars again, which is what we're seeing.

"What is going on, and when are prices going to start falling?"

How have prices reacted to low supply and increased demand? Well, prices are up 8% from last March and up 0.8% from February. Even though the median sales price started steadily declining in metro Atlanta in June, once we hit January and rates went into the fives, we started seeing a pretty significant increase. For those of you who are waiting for prices to come down, that is not looking like it's going to happen.

How would it happen? We would have to see a significant increase in inventory. How would that happen? We would have to see a flood of homes hit the market. Why would that happen? The only reason we would see that many homes hit the market would be in another situation like 2009, where we had a significant number of people in default, and we know that's not happening. In fact, there are fewer people in default now than there really ever have been.

I don't know when prices will come down or if they will. The worst-case scenario is we might see a little bit of a flat lining, but not over the next few months, because when you list a home, and it's great, it's actually going under contract very quickly with multiple offers. Still not as many multiple offers as last spring, but enough to keep the price going up and sellers getting 100% of their asking price.

If you want to know exactly what's happening in your neighborhood or your specific area, let me know. Reach out to me by phone or email, and I will be happy to help you out.