The Atlanta real estate market has had steady growth over the past several years making it a great place to live as well as invest in. Located in the state of Georgia, the city of Atlanta is a hotspot for any type of real estate investing. It is a city with an incredible amount of upside. The cost of living in Atlanta is reasonable when compared to other big cities like Los Angeles or New York. Everybody loves the low cost of living in Atlanta, but the students especially appreciate it making it one of the top rental markets in the United States. This factor alone draws young professionals priced out of those pricier markets.
Atlanta’s tourism industry has taken a considerable hit in light of this deadly pandemic. Numerous large-scale events, such as the NCAA basketball tournament, have been canceled to prevent the spread of infection among large crowds. Local businesses also bore the brunt of the pandemic. The economy was always going to take a hit in the short run. However, Atlanta’s housing market recovered rapidly.
Let’s talk about Atlanta for a minute. Atlanta is a minimally walkable city in Fulton County with a population of approximately 524,000 people. It is currently growing at a rate of 1.67 percent annually and its population has increased by 24.78 percent since the most recent census, which recorded a population of 420,003 in 2010. It reached its highest population of 524,067 in 2021.
In 2013, its metropolitan area surpassed the 5.5 million mark for the first time. While growth is slower than it was in the 1990s and early 2000s, it is faster than the previous year and is expected to continue as Atlanta attracts new residents (source: worldpopulationreview) Atlanta has a mixture of owner-occupied and renter-occupied housing units. One and two-bedroom large apartment complexes are the most common housing units in Atlanta.
Other types of housing that are prevalent in Atlanta include single-family detached homes, duplexes, rowhouses, and homes converted to apartments. The single-family residential housing market in metro Atlanta got impacted by the pandemic with home sales plummeting from April 2020 onward. There was a significant reduction of 25.8 percent in sales for April as compared to the previous year’s numbers.
The housing market in Atlanta experienced a 25.8 percent decline in sales for April as compared to last year, according to the report from Atlanta REALTORS® (ARA). New listings dropped by 32.2 percent compared to April 2019. April’s new listings decreased more than 18 percent compared to March’s new listings as sellers decided to back out in this crisis. Housing inventory in the metro Atlanta area housing market decreased by 13.4 percent from April 2019.
As of now, the Metro Atlanta housing market has recovered smoothly. Despite unemployment and uncertainty, the Atlanta residential real estate market performed exceptionally well in 2020. Home prices skyrocketed in 2020, and the trend continued this year as well. December 2020 home sales continued at a robust pace for Metro Atlanta, outpacing early predictions, and signs pointing to that pace continuing into 2021.
The residential sales were at 6,635, an increase of 6.1 percent from the previous year. The average and median sales prices continued to rise and outpace the figures for 2019. As we write this, the median price of a home sold in the 11-county area in September 2021 month was $359,000. According to the Atlanta Realtors Association, this price is 15.8 percent higher than the median price in September 2020.
Record-low interest rates and are enticing buyers into the market and giving them more buying power. Even as home values continue to rise, low mortgage rates give buyers more buying power. It’s not only low-interest rates pushing up prices to record highs. A lack of homes for sale is a big part of it too.
2021 will be defined by low-interest rates and low inventory, a perfect storm that will continue to push home prices higher. While prices continue to rise slowly, remaining stable at around 14 percent in August and September, inventory just cannot maintain pace. On that front, inventory appears to be stabilizing, typically hovering at slightly more than a month’s supply. Overall, the Metro Atlanta housing market remains competitive, although not as fiercely so as it was a few months ago.
The market is beginning to shift slightly. Buyers may be reserving their purchases during the winter. A year ago, metro Atlanta’s supply matched a historically low 1.8 months, and it has continued to decrease. By May 2021, inventories represented only one month of supply. However, in September 2021, this increased to 1.3 months. That is still very low, but the shift in the housing supply trend was quite substantial.
About 50 percent of the households in Atlanta, GA are renter-occupied. Atlanta rent prices plunged during the most severe period of the coronavirus outbreak when much of the city’s economy was locked down. It is supposed to have ended eight years of steady rent growth in the Atlanta housing market. The rent prices are up whether you compare them annually or monthly.
The average rent for a one-bedroom apartment in Atlanta, GA is currently $1,740. This is an 18 percent increase compared to the previous year (source: Zumper). Over the past month, the average rent for a studio apartment in Atlanta decreased by less than one percent to $1,592. The average rent for a one-bedroom apartment increased by two percent to $1,740, and the average rent for a two-bedroom apartment increased by two percent to $2,243.
The Zumper Atlanta Metro Area Report analyzed active listings last month across 6 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Georgia one-bedroom median rent was $1,230 last month. Atlanta was the most expensive city with one-bedrooms priced at $1,640 while Athens ranked as the most affordable city with one-bedrooms priced at $1,220.
The Fastest Growing Cities in The Atlanta Metro Area (Year-Over-Year)
- Marietta had the fastest-growing rent, up 23.9 percent since this time last year.
- Athens saw rent climb 22 percent, making it the second-fastest-growing.
- Atlanta was third with rent jumping 14.7 percent.
The Fastest-Growing Cities in The Atlanta Metro Area (Month-Over-Month)
- Decatur had the largest monthly rental growth rate, up 4.9 percent.
- Marietta was second with rent climbing 4.7 percent.
The low-interest rates are already leading to an increase in mortgage applications. Buyers looking for this opportunity to invest or buy a house. Low-interest rates coupled with Atlanta’s solid job market could be a boon for the local real estate market even in the time of the Covid-19 pandemic. Keeping aside the short-term effects of Covid-19 which would hopefully end, the Atlanta housing market is strong. There are no signs of weakness in the Atlanta real estate prices.
In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Atlanta can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. This housing market is skewed to sellers due to a persistent imbalance in supply and demand. And, while demand has peaked for the time being, most experts anticipate continued long-term demand, implying little chance of price declines. There is simply not enough housing available to meet demand.
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