Are you thinking of buying a home in Alpharetta GA, but wondering if this is the right time to make that move? Given the existing conditions in the North Fulton County housing market in general and Alpharetta in particular, it is understandable that many buyers are holding back.
However, in order to know if it is better to buy now or wait for prices to drop, you need to know what is driving the market and which direction home prices are likely to go in the future. What is the present state of the Alpharetta housing market and what is driving the trend? Avalon Property Management in Alpharetta helps us answer this question.
Current trends in the Alpharetta housing market
- In December of 2021, home prices in Alpharetta were 26% higher than what they were in December 2020. The median prices for Alpharetta homes currently stand at $558K, with the average home selling 2 - 5% over the list price. As an indication of how high the demand is, many homes get multiple offers with buyers choosing to waive some of the contingencies.
- On average, homes sold only after 17 days of being on the market, 12 days less than last year’s average of 29 days. On several occasions, homes sold in the first weekend after they were listed, surprising the seller and leaving them struggling to find a new home.
- In December 2021, 174 homes were sold in Alpharetta, compared to 246 that were sold in the same period in the previous year. This is an indication of how low housing inventory is. Most times in this market, there is only two months’ worth of inventory available to buyers. In a balanced market, there should be around six months of inventory.
What are the forces driving the trend?
Is the situation likely to change in the coming months? Should we expect home prices to decline or go even higher? Depending on whether the factors responsible for these price increases are long-term or short-term, we can expect prices to fall or the trend to continue.
1. Population growth
Alpharetta is one of the fastest-growing cities in Georgia, it ranks among the 25 best places to live in the USA. The city has a booming job market, great schools, plus incredible shopping, and entertainment experiences. Consequently, people are constantly drawn to the Alpharetta, with the result that the population has grown from 3,000 (the 1980s) to 65,000, with more growth expected.
2. Booming real estate market
As is often the case with cities experiencing rapid population growth, there is immense pressure on the housing market. The current housing inventory is struggling to meet the new and increasing demand. Even though there are a lot of new housing developments going on in the city, this is not happening fast enough to soak up the demand.
3. The Coronavirus pandemic
Alpharetta’s wide-open spaces and charming homes are a great attraction for people who want to protect themselves from the pandemic. The city has a lot of walkable destinations that allow residents to experience the joys of community while social distancing.
4. Record-low interest rates
Many buyers are also trying to take advantage of the historically low-interest rates which are expected to last for several years. With a 30-year fixed mortgage being available for under 3%, buyers have up to 10% more purchasing power than they did in previous years.
5. Effect of government regulations
Well-intended government policies like rent control, height regulations, historic designations, and protective zoning laws, have had the unforeseen effect of substantially increasing construction costs. As it stands, more than 24% of the cost of new housing is taken up by government regulations.
6. Shrinking pool of rental housing
A significant portion of the rental units in the Alpharetta area is owned by "Mom & Pop" landlords who bought them as retirement investments. With the surge in housing prices, which followed the onset of the pandemic, many of these owners sold their assets to cash in on the increased value of the properties. This has placed extreme pressure on available rental properties and helped to worsen the housing supply in the area.
Should you expect home prices to fall in Alpharetta?
The two major factors with the greatest potential to reverse the upward movement of Alpharetta home prices are population growth and new housing developments. If population growth slows and more new housing comes into the market, we can expect prices to stabilize and maybe also start to decline.
But, given the current situation, neither of both is likely to happen. New homes are not being added to the existing stock at a rate that would have a significant impact on prices. At the same time, more and more people continue to move into the city, further compounding the housing shortage. From all indications, home prices will continue to go up in Alpharetta.
This means that if you are looking to buy a home in this city, the best time to have done it was yesterday. The next best time is today.
