Frank Norton Jr. Thursday night provided his 36th annual real estate forecast, looking around the Northeast Georgia area at what buyers and investors can look forward to in the new year.
This year’s Norton Native Intelligence featured ten different sub-areas relating to real estate markets around much of North Georgia. He started by detailing what he labeled “The Big Squeeze,” or ways in which office space, lending and interest rates are all seeing fluctuations in the post-COVID era.
“13% of homeowners with a mortgage have an interest rate of 3% or lower,” Norton details in his report. “40% of homeowners have an interest rate between 3% and 4%. Today’s borrowers witnessed the quick change in interest rates from January of 2022 at 3% to 7% in June of 2023. This brought a huge pause for the mortgage industry.”
Today’s rate sits close to what the agency has predicted with a 50-year average, resting at approximately 7.76%. The agency predicts that number will continue to fall during the second or third quarter of this year.
The second highlighted aspect of the report addressed the idea of supply and demand in the housing market. Currently, the demand is present, but the supply is absent, according to Norton.
“Density is one of the keys to creating new housing inventory and reducing the cost of construction,” Norton reports. “However, some municipalities are reluctant to add new housing even though employers demand for labors housing is at an all-time high.”
In an age of endless information, Norton said society is in an “age of never-ending crisis.” This is due in part to the superfluous usage of social media and mass consumption of world news and information, according to Norton. This aspect has spurred various changes in investor markets, including housing.
Norton outlined the Georgia unemployment rate, which presently sits at 3.4%, ranked 30th in the nation. While jobs are available, there is a reported imbalance between a community's desire for more development and their repulsion of added housing density to support said development, the agency reports.
Today, 65.9% of Americans reportedly own a home, according to the agency. Currently, the Norton Agency declares that the possibility for people to cache in on “The American Dream” is still very much possible, with several presenting difficulties. The primary of which is a rise in housing costs of 69% while median incomes have only risen 22% over the past decade, the agency said.
Another real estate outlook that is on the uptick is industrial, labeled as “white hot” on the market currently, as stated in the agency’s forecast. The overall industrial attitude has shifted from a “just ran out” outlook to “just in case” when considering parts needing to be shipped to various locations around Georgia and the nation as a whole. The agency says this methodology is contributing to the buying up of more industrial business space.
The final game changers, as the agency calls them, include the rise in a “gig economy” and the feeling of “drowning” seen throughout the business, advertising, government bureaucracy, and real estate world today.
“It is time someone let the water out, streamline permitting, lighten inspection loads, simplify all regulations; federal, state, county, or municipality to determine realistic property values,” Norton concludes. “If not, they are going to put us all underwater.”
You can read the full forecast here.
