The fourth-quarter numbers reveal that the housing market in Cobb County continues to improve. These numbers, combined with the overall numbers for the year, show what many of us have been predicting since the end of 2020—2021 is going to be a red hot market. We were right and are encouraged that things continue to look promising. How long that will hold true in the new year remains to be seen, but first let’s take a look at the fourth quarter 2021 numbers for Cobb County, Georgia.
2021 Was a Banner Year for Real Estate
Interest rates remained low throughout 2021 and that made a huge difference in the growth of single-family home prices. In fact, it helped produce the highest number of SFH sales we’ve seen in the past decade and a half. These historically low interest rates kept the foreclosure rates low which prevented another crash in the housing market. It also lowered the number of days homes spent on the market here in Cobb County, throughout the southeast, and in the U.S. in general. This is amazing when viewed against the backdrop of a global pandemic that caused a lot of consumer uncertainty.
It is perhaps because of the pandemic that home buyers were quick to act. With mortgage interest rates so low, folks were keen to act before the Fed raised them. The result is more homeowners and sellers who got well over their asking prices in many cases. Of course, sellers were happy to get that extra money as well, but more homeowners means more people paying property taxes, and communities across the country benefit from that.
Another way COVID-19 assisted the market was that many people were forced to reduce spending on other things. Going out to dinner and the movies, and taking vacations was put on hold for much of 2020. As a result, people were able to save more and put it towards a home purchase in 2021. A shortage of housing stock also created a seller’s market where home sellers were able to entertain higher offers with their homes spending less time on the market. All in all, the housing market was a bright spot in what had otherwise been a pretty dismal year thanks to the pandemic and its many variants.
It was because of all of the pandemic anxieties that the Fed kept interests as low as they have. This prompted many people to take advantage of those rates. The result is what will turn out to be the highest number of sales since 2006. If housing stock remains in limited supply, prices will stay high and days on the market low.
A Strong Fourth Quarter Housing Market for Cobb County
As we said, the U.S. housing market had a fantastic 2021, and our own Cobb County was no exception. Let’s take a look at three of the strongest numbers for the fourth quarter: median sales price, number of homes sold, and days on the market.
Median Sold Price
The median sold price for Cobb County in the fourth quarter was a bit over $400,000 which is up from $340,000 for the fourth quarter of 2020. That’s an increase of just over 17 percent and roughly a three percent increase from the Q3 numbers of 2021 which were $390,000. The median price differs from the average price with the median providing a more accurate picture. The average is the middle between the highest and lowest numbers, of course, but outliers can skew the real picture. The median price, however, throws out those extremes to provide a better sense of what the market numbers actually are and the numbers are good.
Number of Homes Sold
The number of single-family homes sold in Cobb County during the fourth quarter of last year was 2,322. That number is down from the 2020 Q4 number which was 2,798. Not huge, about 17 percent, but something to watch out for, especially since the Q3 number for 2021 was 3,053. So, the number of homes being sold in Cobb County is trending downward even as sales prices have increased.
This drop in the number of homes sold could signal a worsening of the housing shortage which can have a negative impact on the economic outlook of the area. For one thing, it forces renters, who may want to buy homes, to stay put. Increasing housing stock is one way to get out of a shortage, but that takes labor and resources. Supply chain disruptions and shutdowns have made that difficult in the past year and a half. Investment in housing is another way to climb out of a downturn, so this offers developers opportunities if they are positioned to take advantage.
Median Days on Market
For median days on the market numbers for the fourth quarter, we’re looking at seven days. Not a huge shift and a drop from the fourth quarter of the previous year’s nine, but a pretty significant decrease from the 23 days in the fourth quarter of 2019. This is the number of days that a house is on the market from the listing to the signing of the contract. It reflects what is still a very competitive market in Cobb County.
While the interest on mortgage rates remains low, there have been changes early in 2022. For example, a few rates surged upwards to levels we’ve not seen since the early part of 2020. The average for a 15-year, fixed mortgage just last week was 2.76%. That’s an increase of nearly 20 points over the first week of the year. While the monthly payment will be higher, this rate is lower than that of the 30-year mortgage which was at a 3.49 percent average at the beginning of last week, another nearly 20 percent increase.
The Future of the Market
The current year will likely be another strong one for the real estate market and it will also remain a sellers’ market. We can expect home values to rise as well, perhaps by double digits. That is going to price some folks out for the time being, but if the job market continues to grow, with a little patience, things will start opening up for more people. That said, a continued housing shortage would take the shine of that bright future, for sure.
In conclusion, the housing market in Cobb County looks good for 2022. Even if mortgage rates do trend upwards, with more people able to work from home, Cobb County will continue to be an attractive alternative to big city life. Even the commute will be taken out of the equation.
The information collected for this market update was obtained from several places and is subject to change.