With rising interest rates and recession fears, are the housing boom times over?
No, says a couple of real estate professionals, who believe the market is instead going through a correction.
“We’re returning to normal levels,” said DeAnn Golden, president and CEO of Berkshire Hathaway HomeServices Georgia Properties. “What we saw the past two years — 30, 40 offers on a home — is becoming more normalized and balanced.”
Tommy Howard of Gainesville-based The Norton Agency agreed, saying, “It’s more of a balanced market that we’re going into,”
“We are starting to see a slowdown — that’s for certain,” he said. “What I’m seeing is the higher end, luxury part of real estate — over $1 million — that has particularly slowed down. Those in the higher income brackets have paused, watching to see what happens.”
Home sales are still humming, however, in the $400,000 to $600,000 range, Howard said.
Redfin, a Seattle-based real estate brokerage that follows market trends, describes the Gainesville and Flowery Branch housing markets as “somewhat competitive.”
In July 2022, Gainesville home prices were up 25.3% from last year, selling for a median price of $372,000. And on average, homes sell after 15 days on the market compared to 14 days last year, according to Redfin.
By comparison, Flowery Branch home prices were up 16.3%, selling for a median price of $400,000. On average, homes sell after 17 days on the market, compared to 9 days last year.
Statewide, July home prices in Georgia were up 13.9%, selling for a median price of $367,500. The median days on the market was 18 days, up 1 year over year.
Housing development remains at a brisk pace throughout Hall County.
A drive through Flowery Branch alone shows land being cleared for future housing and crews working on homes, such as a 19-townhomes project downtown.
Rezonings also continue to be a thing this year, with sprawling subdivisions still being pitched to local governments for approval.
Starting last year, real estate agents began watching home prices under $250,000 vanish, with concerns being raised that “starter homes” were becoming a thing of the past. Many homes sold in the $300,000-$400,000 range, with many of those selling over their listing price.
Economic worries started to pick up in 2022, with inflation still chomping at bank accounts and recession fears rising.
The Federal Reserve moved to raise interest rates to help rein in inflation. There have been four increases this year, starting near zero and now in the 2.25% to 2.5% range. The next increase is expected in late September.
Rates for a 30-year fixed rate loan was 5.92% on Tuesday, Sept. 6, according to Bankrate.com. At the start of this year, the average rate was 3.4%.
“If you look at a 30-year historical interest rate line, we are still historically low,” Golden said.
Also, she and Howard noted that the housing market is something of a relative thing, based on economies in certain areas of the U.S. — ones that may be growing and ones not as much.
In the Southeast and North Georgia in particular, “we still have such a population growth and job growth, there is still a (housing) demand,” Howard said.
“Atlanta and Georgia continue to be highly desirable for so many reasons,” Golden said.
The Associated Press contributed to this article.