Real Estate: Local market is beginning to change

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By JESS BARRON, Lindsey’s Inc. Realtors

The real estate market is changing.

We are seeing a significant shift in the market as the number of active listings increase and buyer demand slows down. Keep in mind, this is a gradual change and not a sudden and dramatic change. I have seen the number of active listings in Coweta County go from around 140-150 when I check every morning to around 250-300 recently.

We have also noticed that the number of buyers in the marketplace has decreased. Prices are staying strong, but the showing traffic and the volume of offers are not what they once were. As recently as this year I would receive 20-plus offers on a property but those days seem to be gone.

A significant reason for this sudden change is the increase in rates. In late June, mortgage rates rose above six percent. The Federal Reserve announced a large 3/4 percent raise of interest rates in June. The Federal Reserve has also stated that they expect to raise the rates several times this year and next to combat rising inflation in our country. All this seems to have cooled real estate buyer activity. As mortgage rates rise, a mortgage payment becomes higher and higher. An article I read recently from Lawrence Yun, from the National Association of Realtors, stated that the payment on a $300,000 mortgage went from $1,265 in December of 2021 to over $1,800 in June of 2022 because of the mortgage rate increase. This is pricing many buyers out of the market. 

Another reason buyers are leaving the market is how competitive the market is. I wrote about this in a recent article as we are seeing home buying fatigue. Some buyers are tired of losing multiple offer situations over and over. We are seeing large institutional cash investors frequently out bid occupant buyers obtaining a mortgage. Many buyers are simply waiting for the market to cool down.

In fact, this “cool down” could be a good thing for the real estate market and economy in the long run. Jerome Powell, the chairman for the Federal Reserve, has stated that the housing market needs a “reset,” particularly for young homebuyers. Prices have kept increasing despite an increase in listings and a decrease in buyer traffic. It is still a seller’s market in Coweta County, just not as strong as it once was. While the market is shifting, I do not think prices will cool down as quickly as many buyers hope they will. 

Jess Barron is an Associate Broker with Lindseys, Inc. Realtors and former President of the Newnan-Coweta Board of Realtors.

1 comment

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