The Buckhead real estate market so far this year has felt like a dramatic orchestra piece. It began in January with a high-tempo prelude that built to a dramatic crescendo by the end of May. The market has tapered to a steady beat heading into July.
These patterns are typical in our market, being driven by the school calendar, holiday schedules, and summer vacations. This year, however, each stage appeared more pronounced.
The most common question I am hearing is “have we peaked yet?”. The questions being asked in and of itself indicates a potential shift in the market, because buyer and seller expectations drive the market as much as anything. Meanwhile, the Federal Reserve is quickly raising interest rates and, in addition to their core mission of fighting inflation, taming house prices appears to be on the agenda as well. Federal Reserve Chair Jerome Powell said in a press conference on June 15th: “We saw [home] prices moving up very very strongly for the last couple of years. So that changes now….I’d say if you are a home buyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”
The fed policy is starting to have the intended effect, but not evenly across price ranges. The market under $1.5 million is seeing a much greater impact from the dramatically higher interest rates, as buyer in this price range tend to be more reliant on a mortgage. It feels that this dynamic has tilted the dynamic in favor of buyers, but statistics have yet to show this.
Meanwhile, on the high end of the market ($4 million+) where cash deals are far more common, interest rates are much less of a factor, and demand for exceptional homes remains above the supply.
Here is a look at average sale prices and total number of sales over the last 4 years (1st half of the year). Prices are up significantly versus prior years (a new record), but the number of sales are down by a wide margin. Here are the Buckhead home sale statistics for January – June 2022:
|Single Family Homes||2019||2020||2021||2022|
|Average Sale Price||$1,227,185||$1,175,353||$1,337,164||$1,529,464|
|Average Days on Market||56||64||42||32|
|Average Sale Price||$385,875||$384,761||$382,905||$501,430|
|Average Days on Market||50||57||51||34|
Despite the potential headwinds, the top 10 home sales for Q2 actually surpassed the top 10 Buckhead home sales for Q1 that you can see here. The list below demonstrates the strength and depth of demand for high-end homes in Buckhead.