St. Bourke, an Atlanta-based asset management and property development company, reveals a big picture glimpse of housing in 2022 and lookback at the 2021 real estate market. Improved economic conditions and strong demand fueled the Atlanta housing market in 2021 driving home prices, starts and closings to record levels.
“While we expect that housing metrics will continue to climb in 2022, we anticipate the rate of growth to reach a more sustainable level,” St. Bourke President Ben Simpson said.
Despite expectations of continued metrics for Atlanta housing, the market is facing significant headwinds including affordability challenges, sustained demand and low supply.
Affordability is a great concern with rapidly accelerating home prices and interest rates on the rise. At present, seven out of 10 households nationwide cannot afford a new median-priced home. Taking a closer look at YOY home price growth (+19%) and inflation (+7%) compared to wage growth (+3%), it is easy to see how people are being priced out of the market.
Housing demand will stay strong for the foreseeable future. While the pandemic magnified demand for housing, the persistence of this demand now almost 2 years after the pandemic’s onset, is evidence that the pandemic did not create the demand but rather unleashed it. Atlanta continues to be a top in-migration market from higher priced areas of the country, and there are currently 900,000+ millennials within the Atlanta MSA that are approaching prime homebuying age (31 – 34 years old).
Both lot supply and home supply are concerns for the Atlanta market (and nationwide). Atlanta has been under-developing and under-delivering lots and new home product since the Great Recession. Even with increased lot development and home construction in 2021, it is not enough to move the needle. Inventory and supply will improve a bit in 2022 but remain near record low levels.
Even with the myriad of challenges faced by the economy over the last 12 months, 2021 will go down as an overwhelmingly positive year for U.S. economic recovery: the stock market hit record highs, annual GDP growth outperformed estimates (+6.9%) and the unemployment rate declined to its lowest level since February 2020. Obstacles still remain including clogged supply chains, labor shortages and inflation, which all lead to skyrocketing housing costs.
The 2021 Year-End National Housing Market and Atlanta Housing Market Reports are now available to view/download on the St. Bourke website – https://www.stbourke.com/market-reports.
St. Bourke is an asset management and property development company primarily focused on residential communities and commercial assets. Offering a full suite of placemaking services ranging from acquisition through detailed design and development to ongoing management, St. Bourke creates thriving communities and drives significant value for its clients, partners and community stakeholders. Since its inception in 2015, St. Bourke has helped a variety of both private and institutional clients achieve their project goals. With more than 90 active projects across 20 U.S. markets, the St. Bourke portfolio consists of more than 12,000 acres of land and 25,000 residential lots. For more information on how to work with St. Bourke from the ground up, call 678-853-2530 or visit www.StBourke.com.
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