Fall has finally arrived in Atlanta and the third quarter is behind us. We’re excited to share the Q3 Nest Market Report for Atlanta Inside the Perimeter (ITP).
We have broken down this report into five areas. Each of these areas has a unique story to tell. Proximity to The Beltline continues to be a driving factor of values and demand. The more established areas with higher values are showing a correction with a decrease in both sales prices and days on market. The areas experiencing reinvestment and development are experiencing tremendous growth of sales prices. This is especially evident in the Southeast, Southwest, and West areas ITP.
Overall, there are a few key trends that we are continuing to experience. The lack of available inventory—especially at the entry point of a neighborhood or area in both single family detached and attached (condo/townhomes) continues to be the main driver. Lack of inventory is not an isolated issue in Atlanta, as areas around the country are experiencing similar trends. The increase of prices has decreased the amount of total sales.
Rising prices and increasing interest rates have priced many buyers out of the ITP markets, and we continue to face an affordability problem. More new construction is occurring around the area, and much of it is coming in at the upper end of the area/neighborhood market. A buyer searching at the top of a neighborhood/area market is in a favorable position with the most inventory to choose from. Sellers maintain their favorable position at the entry to mid-point of an area/neighborhood market.
Overall the activity ITP saw a 12% reduction in the number of sales as compared to Q3 2017 due to inventory constraints. Contract activity was consistent with Q3 2017, which means that not all buyers are staying in their contracts. The medium sales price for an ITP home increased over 10% from $289K in Q3 2017 to $320K in Q3 2018. Average days on market (DOM) decreased from 41 in Q3 2017 to 36 in Q3 2018.
Continue reading for highlights of the third quarter performance and be sure to read the full Q3 Nest Market Report for Atlanta Inside the Perimeter.
- Sales prices for single family homes fell by 9.9% year-over-year while townhomes/condos rose by more than 20%. This trend shows downward pressure at the top of the market and the demand for more affordable (attached) inventory.
- During the Q3 2018, we saw a whooping 20% reduction in single family homes average days on market fall to 47 days from 58 days year-over-year which reflects pricing corrections. Townhomes/condos remained unchanged at 41 days.
- This is one of the most active areas ITP. Despite that, activity in the east saw a significant reduction of 16% in total sales year-over-year.
- Median sales price for all property types increased from $298,000 to $350,000 year-over-year for the month of September which reflects the challenge of affordability due to the demand of this area.
- Median sales price this past quarter rose a staggering 26.8% from $142,000 to $180,000 in Q3 2018 indicating this area has become a hotspot for investors and first-time buyers. The Beltline is a driver for these areas.
- Average days on market shrank by 15% to 30 days from 35 days in Q3 2017.
- Contract activity is ramping up as we move into the fourth quarter with the number of contacts written in the Q3 2018 increasing by 10%. This is a positive indicator for the fourth quarter. The Beltline expansion is becoming a driver for this area.
- Activity saw a 10% decrease in year-over-year total sales, while the median sales price increased 7% to $267,000 from $250,000 in Q3 2017.
- Total sales were down by 16%, with 458 sales this past quarter compared to 546 in Q3 2017.
- The median sales price rose from $229,000 in Q3 2017 to $248,000 in Q3 2018.
If you have any questions about the market or would like details on a neighborhood or area not shown here, please reach out to your Nest Broker, and we’ll be happy to share that with you.