Thinking about Investing in Atlanta Real Estate?

Did you know that Atlanta is the #1 Relocation city for the US and has been for the last 9 consecutive years? That’s right. On average, 36 people relocate to Atlanta EVERY DAY. In this blog post, I’m sharing the content of a Metro Atlanta Residential Real Estate Forecast written by Harry Norman Realtors. Each of the factors impact our residential Real Estate market and help educate consumers about why investing in Atlanta Real Estate is a smart move.

ATLANTA IS THE #1 RELOCATION CITY

More people are choosing to call Atlanta Home. Atlanta has been the #1 Relocation city in the US for 9 consecutive years. On average, 36 people relocate to Atlanta EVERY DAY.

ATLANTA RANKS #3 IN THE LIST OF CITIES WITH THE MOST FORTUNE 500 COMPANIES

In 2019, Georgia was home to 18 fortune 500 companies. Four Atlanta based companies made it to the top 100: Home Depot, UPS, Delta, and Coca-Cola.

ATLANTA TECH VILLAGE IS THE 4TH LARGEST TECH HUB IN AMERICA

The tech trend is likely to continue due to low corporate tax, favorable employment laws, low cost of living, and our diversity. Immigrants to the US are responsible for more than half of the country’s largest startups.

ATLANTA IS NOW THE CAPITAL OF E-SPORTS

Atlanta is home to three franchised city-based e-sports teams: The Atlanta Reign (Overwatch), Hawks Talon (NBA 2k), and the Atlanta FaZe (Call of Duty). Georgia is home to 150 gaming studios, and the headquarters of major gaming developers.

POPULATION BOOM

In 2020, Atlanta’s population is estimated at 6.11 Million and Metro Atlanta has the 4th fastest growing population in the nation. Over the next 5 years, Atlanta’s population is projected to grow more than any other US city, increasing by over 90,000 annual net migration.

HIPSTURBIA - COMING TO A SUBURB NEAR YOU

Millennials are now the largest population in Atlanta buying homes - this segment of the buyer population is shifting focus from city living to moving to the ‘burbs. They are holding on to their live/ work/ play lifestyles choosing suburbs that offer walkable downtown areas with retail, restaurants, and recreation. This nationwide trend reaches Atlanta areas like Decatur and Alpharetta, and is emerging in places like Marietta, Roswell, and Duluth.

TELECOMMUTING - THE SOLUTION TO ATLANTA TRAFFIC?

In metro Atlanta, more than 600,000 commuters are using telework, compressed work weeks, and flextime to drive change. “We are living in such a fast-paced world that spending time commuting and physically moving from place to place just can’t work anymore.”

IT PAYS TO BE SMART (TECHNOLOGY)

The continued evolution of the Internet of Things, AI, and now 5G is driving increased demand and consumption of smart technologies. Smart buildings and homes are on the rise and home buyers are looking for options with high speed connectivity and green technology.

ATLANTA EMPLOYMENT GOES FROM STRENGTH TO STRENGTH

The US economy continued to support steady employment gains throughout 2019. In December 2019, the national unemployment dropped to a 50-year low of 3.5%. Atlanta’s unemployment sits even lower than the national rate, at 2.9% in December 2019, down from 3.7% in 2018 and 4.6% in 2017.

INTEREST RATES

Mortgage interest rates have a profound impact on housing market activity and overall affordability. The Federal Reserve cut its Federal Funds Rate three times in 2019 and has indicated it is unlikely to increase in the coming months. The 30-year-fixed rate loans interest rates are expected to remain consistently low through 2020 at between 3.7% and 3.8% Historic comparison to interest rates of recent years and past decades, demonstrate that financing a home is now much more reasonable.

HOUSING MARKET INDICATORS

Looking across the full year of 2019 the average sold price of homes in metro Atlanta increased 4.8% to $347,000. In the second half of 2019 inventory became an increasing challenge. New listing inventory increased 2% in the same period in 2018, but sales and pending home sales increased by 7%. This put upward pressure on price and in December 2019 the average sold price of homes in metro Atlanta had increased 8% compared to 12 months earlier, lifting to $354,000.

HOME INVENTORY

The second half of 2019 saw home inventory decline creating a supply shortage. A five to six month supply of homes is considered a balanced market. In quarter four, 2019 the supply in metro Atlanta was about 3.3 months, 6% lower than the same period in 2018. This decline in inventory was not a result of lack of buyer interest; the number of people viewing each residential property increased on the prior year.

THE COST OF RENTING

The cost of renting in Atlanta is almost on par with ownership. The Rent/ Ownership cost ratio in Atlanta is 0.9, meaning that when you account for all costs, renting is approximately 90% of the cost of owning. This is among the highest of all capital cities in the United States and is a factor of high rent and purchase affordability. Rent in Atlanta has increased 5.4% in the last 12 months and 84.5% in the last 10 years. Despite this, the growing transient population of Atlanta keeps rental demand high. Apartment vacancy rates in Atlanta remain extremely low, and anticipated condo conversions of recent years keep delaying due to strong rental revenue.

NEW CONSTRUCTION

When adjusting for population growth, the number of new stats across the last decade was substantially lower than previous. At the end of 2019 annual net construction starts were down 6%. South Atlanta areas saw increases, but these were offset by equal increases in sales of the region, and construction decreases in North Atlanta areas. Construction is one of Atlanta’s fastest growing job sectors, but with much going into commercial and infrastructure, investment in residential real estate is expected to remain flat in 2020.

AFFORDABILITY

Atlanta remains affordable in comparison to other major cities in the United States. The ratio of household income to home price remains reasonable and is a major drawcard for large corporations bringing headquarters to Atlanta. On-going urban renewal projects are creating ‘hot market’ pockets where prices have increased fast, but across the board housing affordability remains better than the two decades prior to the market crash of 2008.

These market conditions have created a hot-bed for real estate in Atlanta. With more people moving to Atlanta every year, we’re expecting prices to appreciate at higher rates and demand to grow stronger. These factors make the Atlanta real estate market a very attractive and safe investment.

We’re seeing more new listings pop up on the market since the beginning of May and we’re taking extra precautions to keep both buyers and sellers safe. With the buyer demand remaining high and extremely low inventory, this market is seeing multiple offer situations in all areas of town. This is a great time to list your home (while the competition is still low) and, in this market, it’s even more important to work with a buyer’s agent! If you’re interested in having a conversation about real estate or have questions, I’d love to chat!