The housing market is one of the few sectors to experience a true V-shaped recovery following the Coronavirus pandemic. However, the main barrier to rising demand remains the lack of inventory.
In Georgia, the number of active listings in September totaled 17,766, a decrease of 6.6% from the previous month. Year over year active listings are down 43.9% and reached the lowest levels since 2012.
As record-low mortgage rates continue to entice buyers into a market with ever-shrinking supply, the newfound demand is driving up house prices.
In Georgia, the Median Sales price for September is $267,770, an increase of 13.5% year on year, or $31,770.
Sales volume totaled $3.8 billion in September, a decrease of 4.0% from August 2020 and an increase of 44.8% year over year.
John Ryan, Georgia MLS Chief Marketing Officer said:
‘Given the uncertainty of the economy and the pandemic, sellers appear to be reluctant to list their home or are refinancing their mortgage. On the other side we have buyers, especially first-time buyers, taking advantage of record low mortgage rates to fulfil their dream of house ownership. All this resulting in record low levels of inventory.
‘Across Georgia we currently have 2 months’ supply of housing. Data has shown that six months of supply is associated with moderate price appreciation. Lower levels tend to push prices up and this is exactly what we have seen across Georgia in recent months.
‘Looking ahead to 2021, many real estate analysts are predicting that the COVID-19 pandemic will lead to a rise in mortgage defaults and foreclosures. If this is the case inventory will increase, in turn resulting in a slowing of price increases and possible decline in pricing depending on the number of houses that come onto the market.’
In Bankrate, Jeff Ostrowski, Senior Mortgage Reporter said:
‘As dramatic as the projections seem, it’s worth noting that foreclosures had fallen to record lows in late 2019. Home prices had risen steadily in the past decade, driven by a strong economy and not enough new construction to satisfy demand.
During the Great Recession, foreclosure filings spiked. In the first half of 2010, 1.65 million American homes went into foreclosure, according to ATTOM. In the first half of 2020, barely 165,000 loans were hit with foreclosure actions. Even if defaults rise dramatically, they’ll remain well below the levels seen during the mortgage meltdown.
Georgia Housing market Trends in Line with National Report
The low inventory trends in Georgia are typical of what we are seeing on the national scale.
Realtor.com reported in the week ending Sept. 19, there were 39% fewer homes on the market compared to last year, and any upcoming uptick is unlikely given the typical seasonal slowdown on the horizon.
The lack of supply has been the catalyst for heated market conditions as median listing prices last week grew at a record 11.1% year-over-year—more than double January’s pace—marking the 19th consecutive week of increasing price tags, the report said.