Atlanta Inventory
Inventory has increased… hasn’t it?
As you can see by the chart I’ve created, inventory has been climbing fairly steady since the beginning of this year. We’ve had huge gains since bottoming out in February of 2021 when the inventory for “detached” single family homes bottomed out at a record low of only 4,670 home in the Greater Atlanta Area.
Does anyone really care about what happened a decade or more ago? Maybe not, but it will give us a perspective and help us to understand the market better.
In the past, a “balanced market” was when we had a four to six month supply of homes available. What does that actually mean? It means that if no more homes listed from any give point in time, at that current rate of home sales (i.e. the time from the initial listing of a home until the time the home goes under contract) all homes would be sold and there would be nothing available . During the pandemic there were times where we had as low as .8 months of inventory meaning that if no one else listed a home everything would be sold in approximately 24 days.
Okay, that was a lot! But it’s critical to know if you really want to understand the market.
So… back to pre-pandemic days! Prior to the pandemic, a balanced market would be anywhere from four to six months of inventory and there would be no advantage to a buyer or a seller. Drop below four months of inventory and we have a “sellers market” due to their being more demand for homes than the number of homes available. That used to mean the seller had somewhat of “the upper hand” in negotiations. When inventory went above 6 months worth the buyers would then have somewhat of “the upper hand” in negotiations.
Even though we are still in a “sellers market” sellers don’t always have the upper hand in negotiations. Higher interest rates (compared to pandemic days) and high inflation have buyers more cautious than in the past. They are not “pulling the trigger” quite so fast these days… especially if they have a home to sell that is at a much lower interest rate. If they are going to commit to a home purchase, they want to make sure they are getting as much “bang for their buck” as possible. When homes are overpriced, buyers are not responding. Hence the huge number of price reductions (we’ll talk more about that in another blog.)
All of this is to say, this is not an easy market to navigate and you want to make sure the agent representing you has a thorough understanding of the market and can truly represent your best interests.
We’d love to chat and see how we can help you navigate these waters.
Give us a call! We’re here to help!