Will the Atlanta Housing Market Crash in 2021?
Updated: Dec 13, 2020
As soon as the novel coronavirus pandemic began to have a toll on the US housing market back in March 2020, Atlanta real estate market crash predictions flooded the internet. Home sales in Atlanta began to decline, and inventories became even scarcer as both sellers and buyers decided to wait for the end of the coronavirus pandemic.
However, the sudden drop in mortgage rates created a new drive for home purchases as buyers are now looking to take advantage of the low mortgage rates. Over the last few months, the demand for homes by buyers in the Atlanta region has increased, thereby increasing homes’ prices.
Local real estate experts, who speculated the possibility of a potential Atlanta housing market crash in 2020 due to the novel covid-19 pandemic, have since shelved their predictions. Others have suddenly moved their forecast to 2021 and are now convinced that the Atlanta housing market is more likely to crash due to the coronavirus ripple effects.
The big question on every investor’s mind in Atlanta and around the country is the Atlanta real estate market crash in 2021?
Is There the Possibility of A Housing Market Crash in 2021?
While there is no direct answer to this question, going by the sudden positive changes in the Atlanta housing market over the last three months, the possibility of the Atlanta housing market crashing in 2021 is less likely to occur. This section will analyze some of the top predictions regarding the crash of the Atlanta housing market in 2021.
The End of Mortgage Forbearance May Cause a Crash
Over the last few months, several articles and social media posts have indicated a pending housing crash in Atlanta once the mortgage forbearance program ends. Many homeowners and investors think that once the federal mortgage forbearance program initiated by the CARES Act ends in 2021, there is a strong likelihood of repeating the 2008 housing crisis.
While the end of the mortgage forbearance program will usher in a period of higher delinquent loans, there is less possibility of it crashing the Atlanta housing market. As of October 2020, only 17% of the 8 million insured mortgages are delinquent, with Atlanta making up 21% of the list. More importantly, the number of delinquent loans has experienced a 17 percent decline from September until now.
And with mortgage lenders initiating stricter lending requirements, it is safe to say that the number of delinquent loans, mainly due to the coronavirus-induced financial hardship, will not lead to the Atlanta housing market crash.
Demand for Housing Will Drop, Leading to a Crash
If you are familiar with the happenings in the Atlanta real estate industry, the chances are that you have heard industry experts speculate about a drastic decline in the demand for housing due to the coronavirus pandemic.
However, the Atlanta real estate market has been experiencing a balanced market, indicating a balance between sellers and buyers. The numbers of homes sold in August were around 9,781, a 7.7% increase compared to the previous year. Additionally, the inventory rate in Atlanta is relatively low. By the end of September, Atlanta area housing inventory, which totaled 11, 313 units is a 23.7% decline compared to 2019.
In terms of house value and pricing, the Atlanta area has experienced a 4% increase in the value of homes in the area, and Zillow predicts that this rise is bound to continue even till the last quarter of 2021. And with the potential of Atlanta becoming a hot seller due to the sudden rise in its economy, population, and employment rate, the price of homes and demand will steadily increase in the coming months.
So When Will The Atlanta Market Crash?
It is difficult to predict when the next Atlanta housing crash will occur owing to the positive nature of the Atlanta housing market and economy. But based on available data and the market conditions of the Atlanta area, it will not happen in 2021. While some local real estate markets may experience price drop, lower demands, or even the possibility of a crash, the Atlanta market is pretty secure for real estate investing.