What Do We See in the Real Estate Market Today?

This month, we planned to spotlight another local business, but they had to postpone it at the last minute. Meanwhile, our agents have received many questions from their friends and clients about the current real estate market. Due to the rapid appreciation of real estate and a higher interest rate climate these days, everyone has an opinion about the real estate market- some good and some bad. The market is different today, but not in the ways most people think. Here are some questions our agents have been receiving along with our response.

Are Higher Interest Rates Hurting the Market?

In the beginning of 2022, interest rates were below 4% and by October rates were around 7%. This represented the fastest rise in rates we have seen, and it has certainly had an impact on buyer demand. Last spring and summer, our local market remained very active, but there is typically a reduction in sales activity once everyone returns to school.  In August we saw the expected slowdown, but it was slower than usual throughout the rest of the year, which was due to the sharp rise in interest rates. At that time, the number of buyers in the market went down seemingly due to people’s uncertainty about the economy and a decline in the affordability of homes. However, after the new year, our interest rate climate stabilized a bit and we saw an increase in buyer demand during the spring. Overall, the number of buyers in the current market is smaller. Regardless, there is still a high demand for homes in our area and we still have a low inventory of homes for sale.

Are You Still Seeing Multiple Offers on Listings?

Yes, some homes are still receiving multiple offers, but it really depends on the property. At one point it appeared that every property received multiple offers, but that is not the case today. As usual, the most desirable properties receive the most attention. For example, a home that is well maintained, priced correctly, and in a desirable location is more likely to receive multiple offers. On the other hand, some homes are taking a little longer to sell. In May, the average time on market in Clarke and Oconee County was around 45 days which is up significantly from 2022, but more in line with the years before Covid. Pricing and condition have always been important, but in the current market they are essential to getting a property sold. Many buyers want something that does not need work and it can be easy to overprice a property in the current climate. If a property needs work or is overpriced, it is likely to sit.

Has the Market Already Peaked or Are Prices Still Going Up?

I really wish we had a crystal ball to see into the future, but right now it seems the market has peaked in terms of buyer demand. On the other hand, it does not seem that prices have peaked. As we say all the time, real estate is local. The Athens area is very desirable for many reasons. A lot of people continue to relocate to our area and UGA is clearly a big economic driver. Meanwhile, our supply of homes remains relatively low. For example, there was less than a two-month supply of homes for sale in Clarke County in May. So far in 2023, homes are still appreciating but at a much smaller percentage than the previous two years.

The biggest story of the market in our area is not price or interest rates, but the decline in overall transactions. As of May 1st, 2023, overall home sales for Clarke and Oconee County were down around 33% from 2022 and down 53% from 2021. Currently, many people are not motivated to sell, which is keeping the supply low. The real estate market has changed over the last year, but supply and demand will always decide the market conditions, and currently supply is still below demand.

If you are interested in staying up to date on market conditions, you can subscribe to our YouTube channel or email [email protected] to receive our video market updates. Lastly, if you have a business in the area and would be interested in having us feature you on upcoming issues, please reach out to us as well.