The answer to, “How long do Atlanta homeowners stay put?” Not as long as in other places! Homeowner tenure in Atlanta has declined.
A recent report from Redfin shows that Atlanta homeowners are bucking a national trend. In most places, the length of time homeowners have been in their homes – called homeowner tenure – has increased over the last decade. In the Atlanta area, it has declined.
Redfin reports that the typical American homeowners had lived 13.2 years in their home in 2021, compared to 10.1 years in 2012. In Atlanta, however, the number fell from 10.3 years in 2012 to 9.8 in 2021.
What’s behind the national numbers? As the average age of homeowners increases, more are choosing to age in place. In some parts of the country, tax laws encourage people to stay in their homes. In California, for example, property tax increases are limited as long as homeowners reside in their current home.
In the last few years, many homeowners have refinanced into historically low mortgage rates – and low payments – they can’t beat in the current market of increasing rates and prices. They have a financial incentive to stay put. Furthermore, if they choose to move and are able, their affordable mortgage combined with rising rents gives them further incentive to keep their home as an investment property rather than selling it.
This reluctance of homeowners to move has created a shortage of homes on the market. Nationally, the number of homes for sale is down about 50% from before the pandemic. The limited supply is a conundrum that both feeds and is fed by homeowners’ lengthy tenure.
On the one hand, there are few options for growing families to trade up into or for older homeowners to downsize into. On the other hand, the more homeowners are hamstringed into staying put, the fewer homes go on the market for prospective buyers. And homebuilders can’t build enough homes fast enough to keep up with demand.
These factors are at play in Atlanta, too, of course. Inventory is tight, more homeowners are choosing to age in place, and people don’t want to lose their favorable interest rates. So what’s different?
Atlanta has long been a migration destination – many homebuyers move in from other metros. And homebuilding is very strong in Atlanta, so the area has added housing to support much of the influx. This is especially true since the beginning of the pandemic, when remote work has enabled people to move into more affordable locations with more space.
In a Redfin analysis of its users, Atlanta was the 10th most popular metro for relocating homebuyers in January 2022. The metro area experienced a net inflow of 3,925 during that time. About one-fifth of metro Atlanta searches by Redfin users came from outside the area. The top place of origin for both out-of-area searches and moves was New York, NY. These numbers were actually down from earlier in the pandemic. January 2021 saw a net inflow of 5,519 Redfin users and just over a quarter of searches from outside the metro area.
What’s the future for homeowner tenure? Because of conflicting factors, it could go either way. On the one hand, people are still making moves as the Great Resignation endures and workplaces shift amid re-openings, moves and hybrid work. On the other hand, rising rates and home prices – the result of inflation, supply chain disruptions and overall economic conditions – may encourage homeowners to wait it out a little longer.
But one thing is for certain – Atlanta real estate remains in high demand for natives and newcomers alike. It appears that as long as we keep building, they will come.
For more local real estate economy stories, click here.
Photo of home courtesy Peachtree Residential.