Note: Our market forecast includes Atlanta data and data from its surroundings, including Sandy Springs and Roswell.
Why consider Atlanta for real estate investing?
Most real estate investing experts consistently put Atlanta on a top 10 list for best cities in the United States to invest in real estate, and it looks like Atlanta will keep that status for 2021. Some of the factors that make Atlanta such a great place for real estate investors: the low price of entry, consistent and steady population growth, and a healthy job market that includes many financial and tech-based companies and startups.
Atlanta’s history dates to 1837, and the city derives its name from the Western & Atlantic railroad, of which Atlanta was the last stop. This fast-growing city, staying true to its roots, is a transportation hub: Hartsfield-Jackson Atlanta International Airport is the world’s busiest. And not only that, this capital of the Southeast has the third-largest concentration of Fortune 500 companies.
Atlanta’s links to the civil rights movement go back decades, and its historically Black colleges -- Clark Atlanta University, Spelman College, Morehouse College, and the Morehouse School of Medicine -- create a climate that makes Atlanta a top spot for Black entrepreneurs. The New South vibe embraces diversity by making room for everyone. Atlanta’s a city of trees mixed with impressive skyscrapers, making this a beautiful, modern city filled with southern hospitality.
The state of the market
The biggest takeaway regarding the Atlanta real estate market is there's practically no supply of single-family homes available, particularly in the first-time-buyer or entry-level home market. Real estate agents are seeing unprecedented numbers of buyers when homes go on the market, and this often creates frenzied bidding-war situations where some buyers are waiving all contingencies.
Here are some trends worth noting:
- Rent prices are increasing: Rents are rising in Atlanta, mainly because the increased demand for housing and rising home prices are making it difficult for people to buy, so they continue to rent, creating a demand for rental housing that leads to increased rents. Also, construction costs are higher after the coronavirus pandemic, mainly due to an increased lumber cost, and that keeps the supply of homes low, thereby further increasing the demand for rental properties. The demand for single-family homes to rent is also high since 49% of the population are families with children.
- Housing supply is low: If you already own rental property in Atlanta, you're in the driver's seat, as it's a good time to both hold the property for cash flow or to cash in now by selling while prices are high, demand is strong, and supply is low. Investors who can pay cash can still get a good deal, but they need to prepare for more competition until something changes: more supply to answer demand and/or higher interest rates on mortgage loans to lessen demand.
- Delinquencies have peaked: With eviction moratoriums in place, many renters stopped paying rent. Rental assistance programs helped some of the time, but there have been hoops to jump through to receive rent relief, and not all tenants or landlords have been able to receive the funds. When more people return to work and are able to pay rent again, and when eviction moratoriums are lifted, the increased delinquencies should return to their normally lower levels.
The coronavirus lockdowns caused job losses in Atlanta, just like the rest of the country, but the city is on a recovery trajectory as the state of Georgia gradually returns to normal.
Atlanta housing demand indicators
Charts courtesy of Housing Tides, an EnergyLogic company.
Housing demand is high in Atlanta with not enough supply, so home prices are expected to continue to rise.
Atlanta was among 12 of the largest metropolitan areas in 2020, and all 12 metros suffered job losses due to lockdowns that occurred during the coronavirus pandemic. Atlanta fared better than most, having had the third-slowest rate of job loss. While leisure and hospitality lost the most jobs in all metros, Atlanta experienced the smallest job loss of all major metros in this sector. Also of note is that trade, transportation, and utilities gained the most jobs in two major metros, one of which was Atlanta.
Atlanta has tracked the nation fairly closely since 2016 regarding unemployment. The city started doing a little better than average in late 2019, and that trend has continued ever since. Atlanta had a spike of unemployment during the coronavirus pandemic, as did the rest of the nation, but Atlanta fared better than the rest of the country and has kept that status ever since.