The real estate market in Atlanta is sizzling hot with a record low home inventory due to a lack of construction over the past decade. Instead of benefitting buyers, sellers are coming out on top in this crazy and competitive market which is fueled by Millennial homebuyers who are finally buying homes!
After the initial lockdown in 2020, many people became dissatisfied with their homes due to a lack of space and a desire for privacy and outdoor living options. New home and resale purchases took off causing the already low new home inventory to reduce further. Construction of new homes continues to pick up, but home builders continue to struggle with the demand, especially when coupled with inventory shortages of lumber and other building materials. In 2021, homes go pending between 9 days (if a hot commodity) and 31 days according to the AJC, and currently, 36.5% of homes sell above the market price.
Millennial homebuyers, tired of renting and craving space of their own, are a large portion of current homebuyers. Rent costs higher than the national average in the metro Atlanta area and favorable mortgage rates led millennials to invest in real estate and enter this aggressive market.
Atlanta is known for a distinct abundance of affordable housing, but this drastically changed because of the pandemic. The current median sale price for homes in the metro Atlanta area is $342,700. According to Zillow, that is a 13% increase in single-family home values year-over-year. The value of single-family homes has steadily increased since 2012. The current median sales price tells the story of families flocking to private residences to protect themselves from skyrocketing rent, lack of privacy and uncertainty.
Graph information courtesy of Zillow.
In an interview with Georgia Public Broadcasting (GPB), Roy Black, a finance professor at Emory University, stated that Atlanta has an archetypal problem. There is a presence of an imbalanced housing inventory and high demand. Atlanta is a unique city to find affordable homes ranging from traditional to craftsman-style in a metro location. Affordable housing is disappearing as the need continues to rise and builders struggle to keep up. The article from GPB perfectly showcases the current market and further describes an outlandish price increase for a home in Grant Park that sold for $669,000 when it previously sold for $175,000 in 2017. Of course, it may have had significant updates..
In January 2021, PR Newswire, a press release distribution network, announced an exciting House X program. The American Dream 2021 expands homeownership and highlights energy-efficient homes in 21 cities across the country. The project will build over 40,000 new homes valued at over $18 billion. The Atlanta Pilot includes over 2,750 new homes in 409 communities, where homeowners will benefit from potential free renewable energy stimulus and a discounted mortgage option. This move will increase affordable housing options in Atlanta and cushion the weakened new home inventory.
Those relocating to the metro Atlanta area are more likely to buy versus rent to save money in this affordable metropolitan hub. The Atlanta Regional Commission released a report that linked affordable housing and the wish to attract more than one million residents over the last decade.
Despite the competitive market, Atlanta is a great place to find affordable housing. From stylish studio apartments to single-family residences, construction occurs in the most exciting and upcoming metro communities.
To stay updated on the tumultuous real estate market in metro Atlanta, visit www.atlantarealestateforum.com.