Atlanta needs entry-level housing, yet roadblocks stand in the way

MarketNsight Offers Housing Forecast at MarketWatch Atlanta

MarketNsight, a leading provider of real estate data and analysis, recently hosted its biannual MarketWatch Atlanta event via Zoom, releasing data on the state of the Atlanta new home industry. According to John Hunt, Principal and Chief Analyst at MarketNsight, the housing shortage in Atlanta (especially related to entry-level housing) and elsewhere throughout the Southeast will continue. “We had a housing shortage before the pandemic, the pandemic made it worse, and current market conditions will only make it worse,” states Hunt.

In a market that desperately needs entry-level housing, increasingly Atlanta homebuyers find the door to homeownership closed.  At present, inventory under $350,000 is basically extinct. “We need starter home inventory. We are witnessing an all-out war on affordable home prices,” said Hunt.

Many roadblocks stand in the way of affordable and entry-level housing, including outdated city and county zoning laws that don’t allow for smaller homes. Zoning needs to be updated to allow for 1,400 to 2,000-square-foot houses, as these are what entry-level buyers (millennials) and move-down retiree buyers (Boomers) want.  Hunt adds, “This is who you want in your neighborhood and community.  Unfortunately, our zoning is 20 years old or older and doesn’t allow for small homes in most places.” These demographics have all the money, don’t have kids, are entertainment-oriented, and the location is the amenity.

How did we get here? “Typically, housing starts, and population growth have trended together. However, we broke this trend during the Great Recession,” said Hunt. Inventory is 56% below where it was pre-pandemic in 2019.  Once Millennial buyers started buying, monthly home supply dropped from 2 to .7 months, and it hasn’t fully recovered. Atlanta ended May 2023 with 1.6 months of supply (as compared to the 6 months of supply which is considered normal).

MarketNsight reports that the Atlanta metro area has an annual housing deficit of 60,000 units, meaning if these units were readily available for purchase, they would be sold within the next year at the current absorption rate.

“New homes can’t fix this deficit,” said Hunt. “We may put 13,000 lots on the ground in the next 12 months.”

Despite inflammatory headlines, there is no housing collapse. “Since January, if you average it out, home prices are flat. We are not going to see housing prices collapse in our footprint.,” states Hunt. “We are going to see home price appreciate go back to the norm, which is 4.5 % annual appreciation.”

There is only a 15% gap between new homes and resale pricing. “Home prices are up, but not crazy by historical standards.”

What are Atlanta’s hottest markets? At present, the top high school districts are Jackson, Woodstock – Cherokee, Grayson, Dutchtown, Sandy Creek, Apalachee, West Forsyth, Langston Hughes, East Coweta, Cherokee, North Pauling, North Forsyth, East Paulding, Campbell and West Hall.

Where will builders build next? The highest lot inventory is available in South Fulton, Gwinnett, Barrow, Houston – Macon, Chatham – Savannah, Cobb, Paulding, Jackson, Columba – Augusta, Forsyth, Hall, Cherokee, Coweta, Henry, Effingham – Savannah, Camden – Golden Isles, Newton, Richmond – Augusta, Bartow and Douglas.

How are permits trending? Permits are down 30% in most major cities. This is because the pandemic housing boom burned through available lots. However, many smaller cities are not down in permits. Brunswick is up 30%.

Forecast: MarketNsight comments that it is too difficult to bring new lot supply online. Hunt adds, “We predict we end the year down 20% in permits. Builders and bankers are throttling back, but some of these deals will show up in other places. We are pushing further out from metro areas based on where people can afford a home.”

To learn more or to schedule a demonstration, visit

Click here for more MarketNsight news.

About MarketNsight:
MarketNsight currently serves 40+ cities in nine states – Alabama, Florida, Georgia, Louisiana, North Carolina, South Carolina, Tennessee, Texas and Virginia. Look for the addition of more cities soon!

To schedule a demonstration of the MarketNsight Feasibility Matrix® or Mortgage Matrix®, call 770-419-9891 or email For information about MarketNsight and John Hunt’s upcoming speaking engagements, visit

1 thought on “Atlanta Needs Entry-Level Housing, Yet Roadblocks Stand In The Way  ”

  1. Hi, John.

    Great points in your article! I believe you may have omitted the greatest change that impacts availability of of owner-occupied homes–for rent new construction.

    Many other studies about the low production of single-family homes seem to “gloss over” the phenomenon of portfolio buyers and their quest for ever-increasing cash flow. In this era, any increasing cost of money is of little consequence to the funds that generate their own investment dollars. I could go on and on; however, it would become repetitive! Supply of single-family homes will continue to dwindle as constant or increasing cash flow is earned from construction of build to rent products–be they townhome or multi-family construction! Even construction of 2-4 family units have become almost extinct so the small first-time investor is also feeling the supply squeeze.

    Appreciate your thoughts. I do grant your zoning concerns as most zoning codes are linked to future land use maps and are themselves loosely written from the bygone era you suggest! Most local governments move at glacial speed to amend zoning regs while the speed of money is infinitely faster!

Leave a Reply

Your email address will not be published. Required fields are marked *