MarketNsight hosted its bi-annual December MarketWatch Atlanta event virtually this week, releasing November numbers for the Southeast, giving a state of the market and offering predictions for 2021. MarketNsight and ViaSearch President John Hunt, joined by Chief Economist and Director of the Economic Forecasting Center at Georgia State University Dr. Rajeev Dhawan, made note of the unprecedented year housing has experienced.
According to Hunt, the market was in extremely good shape as we entered March, then came COVID-19 (coronavirus) and the shelter-in-place order.
“It was like being on the Scream Machine, the market fell off the cliff with lots of screaming on the way down and everything just stopped,” Hunt said. This, however, was short-lived as low interest rates and low inventory drove buyers to the market.
“People figured out that they could buy a home online,” Dhawan said.
“It looks like Atlanta will end the year up 20% YOY for pending new home sales and up 6% for new home permits,” Hunt said. “This is a strong finish to this unprecedented year.
“We were already on a train before the pandemic. It looks like we are getting back on the same train with low interest rates and low inventory.”
What does MarketNsight predict for 2021? Hunt forecasts new home pending sales will remain strong in 2021 and anticipates new home permits will be up 10% YOY.
“The Atlanta new home market is capped by its ability to supply, not by demand,” Hunt said.
It has become more difficult to develop in the metro area because of several factors – lack of development money, government red tape, zoning issues and overall failure to get projects approved. In fact, Atlanta recently dropped to No. 4 from its long-held position as the No. 3 housing market in the country.
“Again, this isn’t because of lack of demand,” Hunt said. “It is due to the fragmentation of the market, entitlements and just the extreme difficulty of bringing projects to market. For as strong as 2020 has been, the Atlanta market is still only at 47% of its peak in 2006 (down 53%).
“As for price, new home prices jumped 12% in November. This is after being year-to-year since January,” Hunt said. “We are starting to see some pricing power in new homes. Resale list prices are out of control, and we are seeing 21% price increases in resale homes fueled by multiple offers and lack of supply.”
MarketNsight sees strong growth throughout the Southeast. Cities of note include:
- Augusta at 101% of peak with lots of demand.
- Raleigh at 90% of peak.
- Savannah at 87% of peak.
- Nashville is back to peak pending sales and is the only city that never went negative during the pandemic.
MarketNsight is focused on helping home builders and developers make smart decisions related to purchasing land and pricing product. Its groundbreaking Feasibility Matrix® systemizes the decision-making process and creates a one-stop-shop for gauging new home community feasibility including ranking by builder and subdivision and developed lot and raw land sales.
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