The third-quarter numbers reveal that the housing market in Cobb County continues to improve. This is a bit of good news at a time when it seems like good news is in short supply. Low interest rates have fueled a great deal of this continued trend. The COVID-19 pandemic also gave many people plenty of time to rethink their live/work situations and they downsized and upgraded into new housing accordingly. After the second quarter of this year, things were starting to look up as the beginning of the end of the pandemic seemed to be in sight. The recent rise of the Delta variant has put a bit of a damper on things but this hasn’t slowed the market much.
The current market definitely favors sellers at this point and that could lead to problems as fewer homes are being sold and those that are, are being sold at higher prices. It may be a signal of a housing shortage and with prices high, many people who want to buy homes are getting priced out of the market. That said, it’s certainly no time to panic. In fact, it’s a great time for home buyers and sellers to make their move in Cobb County while interest rates continue to remain low. Here’s a deeper look at the third-quarter numbers.
Median Sold Price
As we mentioned, the numbers for Cobb County in the third quarter remain encouraging. In Q2 of this year, the median sold price was $365,000 and in the third quarter, that number rose only $549 to $365,549. When we compare the third quarter of 2020 to 2021 we also see an increase, in this case, 14.5 percent.
This is great news, of course, and it’s important to point out that this is the median price and not the average price. These are two different numbers and the median sold price is a much more accurate gauge of what homes are selling for than the average selling price. The reason is, the average sold price uses both the highest and lowest sales in the equation. This can skew the numbers, but the median sold price kicks out those outliers and provides a more accurate picture. At any rate, the numbers are definitely trending upwards and many sellers are getting offers that exceed the asking price.
Number of Homes Sold
Next, let’s look at the number of homes sold in Cobb County, GA in the third quarter which is 3,864 units. That’s a drop of nearly three percent from the previous quarter’s numbers of 3,975 units sold. Compare the Q3 2020 numbers to this quarter, however, and that’s a drop of about six percent. So, the number of homes sold is fewer but the prices have gone up. That’s generally a sign that there is a housing shortage. This can have a negative impact on the economy as many would-be home buyers can’t get housing they can afford and will have to remain renters. The only way out of a housing shortage is to increase the amount of available housing which requires a lot of investment. That said, these aren’t huge numbers yet, but it’s something to keep an eye on for sure.
Median Days on Market
Looking at the Days on the Market numbers for the third quarter and we see an increase of only one day from Q2 numbers. Median days on the market is a measure of the time a home is on the market from listing to when the buyer signs the contract. Even though the number of days did rise slightly, when we compare this to the 12 DOM from the third quarter of 2020, that’s a huge difference and another sign of a seller’s market. It also means competition is pretty stiff and that a lot of would-be homebuyers are being priced out.
The current low interest rates are due to the ongoing economic stability caused by the global COVID-19 pandemic. As uncertainty continues, the Federal Reserve is not likely to raise interest rates in the short term. Of course, this could change at some point in 2022, but for now, rates remain low. In fact, at the time of this writing, the average mortgage rate on a 30-year fixed-rate mortgage is 3.048 percent. For a 20-year fixed-rate mortgage that rate is 2.633 percent. A 15-year mortgage rate sits at 2.115 and a 10-year fixed rate is 2.052. This has been a driver in home sales and will continue to be as folks around the country and in Cobb County take advantage. It’s a good time to upgrade or downsize and if you’re on the fence about selling your home, it would be wise to act before interest rates go up again.
What the Numbers Mean
As sale prices increase on a fewer number of homes, this indicates a strong housing market but one that favors sellers over buyers. If this trend continues, it could lead to a housing shortage which would have an impact on the overall economy of Cobb County as the only way to drive prices down is to increase the supply of housing stock.
Also, as people get priced out of the market they are forced to continue as renters. That said, this also provides opportunities for investors and developers to create more affordable housing options. For those considering selling their home, with more units on the market, the sales prices will go down.
As we mentioned, mortgage interest rates remain a huge incentive for buyers. While it does not appear that the Federal Reserve will raise rates before the end of the year, rates won’t remain this low forever and many homebuyers want to lock in those rates before they go up. The bottom line is, while it may be a bit of a seller’s market, it’s a good time for buyers and sellers to take advantage of current market conditions.
The information collected for this market update was obtained from several places and is subject to change. It is presented here only as a snapshot of the Cobb County real estate market in September 2021.