Atlanta, GA Real Estate Market Trends & Analysis [Updated 2021]

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The Atlanta real estate market in Georgia has enjoyed nearly a decade’s worth of positive growth. Since the depths of the Great Recession, just about every indicator has improved dramatically. However, it is worth noting that the presence of the Coronavirus nearly brought nine consecutive years of progression to an end. “Shelter-in-place” orders issued in the wake of the pandemic presented real estate in Atlanta with its first real test since the first quarter of 2012. Fortunately, the Georgia city appears willing and able to come out of this crisis stronger than when it went in. While the Coronavirus has certainly taken a toll on the Atlanta housing market, the city’s unemployment rate, median sales price, and demand have all fared relatively well. With fewer people claiming unemployment than the national average, the city’s economy should be able to position itself at the forefront of recovery.

Atlanta Real Estate Market 2021 Overview

• Median Home Value: $313,818

• 1-Year Appreciation Rate: +6.9%

• Median Home Value (1-Year Forecast): N/A

• Median Rent Price: $1,795

• Price-To-Rent Ratio: 14.56

• Atlanta-Sandy Springs-Marietta Unemployment Rate: 4.5% (latest estimate by the Bureau Of Labor Statistics)

• Atlanta City Population: 506,811 (latest estimate by the U.S. Census Bureau)

• Atlanta City Median Household Income: $59,948 (latest estimate by the U.S. Census Bureau)

• Percentage Of Vacant Homes: 20.66%

• Foreclosure Rate: 1 in every 8,146 (1.2%)

2021 Atlanta Real Estate Investing

The Coronavirus has impacted investors across the country, and the Atlanta real estate investing community is no exception. However, the local market has fared better than many of its national counterparts, which begs the question: Is Atlanta a good place to invest in real estate?

The Atlanta real estate market has been a great place for investors to conduct business over the last nine years, and there’s nothing to suggest the same won’t hold true moving forward. In fact, the presence of the Coronavirus has actually created a unique window of opportunity for local investors to take advantage of. Despite all that has happened, the Atlanta housing market still appears to be a great place to invest.

Since 2012, real estate in Atlanta has been very attractive to rehabbers. The city’s relatively high foreclosure rate, demand, and inexpensive real estate culminated in an environment that suited investors in search of high profit margins well. To this day, in fact, the city remains a great location to rehab real estate deals. It is worth noting, however, that the new landscape created in the wake of the Coronavirus appears to cater to a different exit strategy: building a rental property portfolio. Now, perhaps more than ever, real estate in Atlanta appears suited to benefit long-term investors who intend to rent their properties out to tenants.

The real estate industry is certainly different after the arrival of the Coronavirus, but the emergence of three indicators have made buy-and-hold investment strategies more attractive in 2021. These Atlanta real estate market trends should tip the scales in favor of buy-and-hold investors:

• Interest rates on traditional loans are historically low

• Years of cash flow can easily justify today’s higher acquisition costs

• The price-to-rent ratio suggests high home prices will increase rental demand

As of March, the average rate on a 30-year fixed-rate loan was 3.08%, according to Freddie Mac. While the March rate represents an increase year-to-date, rates are still very attractive for buyers. What’s more, the Fed announced it would keep interest rates low for the foreseeable future. As a result, the cost basis is lower than what median home prices suggest. At their current rate, mortgage rates will save today’s buyers thousands of dollars, and real estate investors will be able to pad their bottom line. At the very least, investors will be able to justify the latest bout of appreciation with much lower borrowing costs.

The city’s 14.56 price-to-rent ratio lends itself to increasing rental demand. To be clear, anything below 15 suggests it’s more affordable to buy a home than to rent one, which typically works against landlords. However, the current pandemic has already detracted from insufficient inventory levels and made listings increasingly harder to come by. Even those who want to buy will have a hard time doing so because there isn’t enough inventory. As a result, many would-be buyers will be forced to rent, increasing rental property demand and competition. The influx of renters should benefit rental property owners for the foreseeable future.

Atlanta real estate market trends in 2021 look slightly different from previous years, but they are nonetheless beneficial to investors. Instead of favoring rehab exit strategies, today’s trends now promote the development of rental property portfolios.

2021 Foreclosure Statistics In Atlanta

At 1.2%, the foreclosure rate in Atlanta is relatively high. Nearly one in every 8,146 homes falls under one of three foreclosure categories: default, auction or bank owned. To put things into perspective, the national foreclosure rate is somewhere in the neighborhood of 0.8%, with a mere one in every 11,396 homes in some state of distress.

Distressed homes represent the best opportunity to buy a discounted property, which has many people asking one, simple question: Where should I invest in Atlanta? It makes sense to invest in the neighborhoods with the highest distributions of foreclosures, which include:

• 30303: 1 in every 1,579 homes is currently distressed

• 30314: 1 in every 2,844 homes is currently distressed

• 30344: 1 in every 4,173 homes is currently distressed

• 30305: 1 in every 4,737 homes is currently distressed

• 30342: 1 in every 7,046 homes is currently distressed

To be clear, foreclosures are historically low. Nearly a decade’s worth of recovery and appreciation has brought a lot of homeowners up from underwater. However, the presence of the Coronavirus is expected to increase foreclosure rates across the country, and the Atlanta housing market is no exception. The Coronavirus will most likely put a significant financial strain on many homeowners. When forbearance programs run out later in the year, an influx of foreclosures will most likely ensue. There is no telling how high foreclosures will rise, but there’s a good chance they’ll be higher than at this point today. As a result, those who position themselves well today may be in line to acquire a deal sooner rather than later.

2021 Median Home Prices In Atlanta

The median home price in Atlanta is $313,818, according to Zillow. That said, today’s price results from several factors, not the least of which unfolded over the better part of a decade. At this point in 2012 (April), the median home value was about $139,000, which means home values have appreciated approximately 125.7% in nine years. The increases were primarily the result of three specific indicators: improvements in the economy, positive sentiment, and (ironically) a lack of available housing. To put things into perspective, the national average increased slightly more than fifty percent in the same time.

In the last year alone (February 2020 to February 2021), the median home value rode the coattails of insufficient inventory levels to the tune of a 6.9% increase. As it turns out, supply and demand favor sellers, who could increase prices as more and more people competed for their homes. According to the Atlanta Realtors Association, active listings have dropped 55.8% year-over-year. At the same time, new listings have also decreased 7.4% from 2020 levels.

Inadequate inventory levels have propped up home values for a long time, which has led to some neighborhoods appreciating more than others. Years of historic appreciation, in fact, have made these the most expensive neighborhoods in Atlanta (according to NeighborhoodScout):

• Chastain Dr NE / Roswell Rd NE

• Vinings

• W Wesley Rd NW / Moores Mill Rd NW

• Northside Dr NW / Collier Rd NW

• Northside Pky NW / W Paces Ferry Rd NW

• Alexander Cir NE / Phipps Blvd NE

• Chatham Rd NW / Andrews Dr NW

• Brookwood Valley Cir NE

• Northside Dr NW / Mount Paran Rd NW

• Lenox Rd NE / Wildwood Rd NE

Prices will remain high as long as inventory is low and perhaps even return to previous highs as soon as this time next year. If for nothing else, the same inventory shortage that served to increase prices in the past may be magnified by home builders sitting on the sidelines during the pandemic. Without new builds being brought to the market, it is safe to assume competition will remain high, which begs the question: Is Atlanta a good real estate market?

The real estate market in Atlanta is a great real estate market that has something for everyone. While prices have increased dramatically, they are still below many of their national counterparts. Additionally, demand remains intact. Despite increasing home values, people still want to buy, which stimulates activity and props the market up for everyone.

Atlanta Real Estate Market: 2020 Summary

• Median Home Value: $299,308

• 1-Year Appreciation Rate: +3.4%

• Median Home Value (1-Year Forecast): -1.5%

• Median Rent Price: $1,795

• Price-To-Rent Ratio: 13.89

• Atlanta-Sandy Springs-Marietta Unemployment Rate: 10.3% (latest estimate by the Bureau Of Labor Statistics)

• Atlanta City Population: 506,811 (latest estimate by the U.S. Census Bureau)

• Atlanta City Median Household Income: $55,279 (latest estimate by the U.S. Census Bureau)

• Percentage Of Vacant Homes: 20.66%

• Foreclosure Rate: 1 in every 5,798 (1.7%)

Atlanta Real Estate Investing 2020

Atlanta real estate market trends were thrown a curve when the Coronavirus was officially declared a pandemic. In a matter of weeks, real estate in Atlanta went from a hot commodity with more demand than supply to something nobody wanted to touch. The impact of COVID-19 on the real estate market was most noticeable in the amount of activity, or lack thereof. As fear and uncertainty took hold, buyers stopped touring homes, sellers stopped showing properties, and loan underwriters saw business decline significantly. By the end of the first quarter, the Atlanta real estate investing community faced a genuine risk.

To be clear, the risk facing Atlanta real estate investors in the first quarter of 2020 was very real. However, risk quickly turned into opportunity as the government stepped in and lowered interest rates. In an attempt to spur activity, borrowing costs were cut, encouraging more buyers to participate in the market. The Fed’s plan worked well, as more buyers got off the fence, but demand quickly turned into competition. Shortly after interest rates were lowered, it was clear that demand greatly outweighed supply. As a result, prices increased an average of 6.0% in the last three quarters of the year.

2020’s rapid appreciation rates, in addition to nearly a decade’s worth of price increases, ate into investor profit margins. Flips, in particular, became harder to profit from in 2020. Instead of settling for smaller profit margins, however, 2020 was the year many investors turned to long-term rental strategies. Historically low borrowing costs made it possible to offset high prices and increase monthly cash flow from rental operations. Additionally, the lack of housing supply increased the number of renters in Atlanta. Landlords had multiple indicators working in their favor, which played out over the course of 2020.

Atlanta Real Estate Market: 2018 Summary

• Median Home Value: $248,100

• 1-Year Appreciation Rate: 14.3%

• Median Home Value (1-Year Forecast): 8.3%

• Median Rent Price: $1,725

• Number Of Foreclosures: 1,172

• Homes For Sale: 5,010

Atlanta Real Estate Investing 2018

By 2018, the Atlanta real estate market had placed the latest recession in the rearview mirror and refused to look back. Many of the fundamental indicators used to judge a market’s health were better off in 2018 than even just a few short years ago. According to Atlanta real estate news outlets, home values increased at nearly twice the pace of the national average without sacrificing demand, and investor activity gained a lot of momentum. Perhaps even more importantly, however, the city remained in the running to host Amazon’s second headquarters. While the Atlanta housing market failed to reel in the e-commerce giant, the local market has still fared very well since.

Atlanta real estate investors enjoyed an active 2018, evidenced by the hot start to the year. In fact, few cities across the country increased their home flipping rate from the previous year more than Atlanta. According to Attom Data Solutions, Atlanta had the third-highest increase in flipping rate in the first quarter of 2018 among qualifying cities.

“Among markets with at least 1,000 home flips in the first quarter, those posting a year-over-year increase in their home flipping rate in Q1 2018 were Phoenix, Arizona (up 15 percent); New York, New York (up 20 percent); Atlanta, Georgia (up 4 percent); Philadelphia, Pennsylvania (up 6 percent); Chicago, Illinois (up 7 percent); Dallas-Fort Worth, Texas (up 2 percent); and Detroit, Michigan (up 17 percent),” said the report.

Atlanta Real Estate Market: 2016 Summary

• Median Home Price: $167,800

• 1-Year Appreciation Rate: 6.2%

• 3-Year Appreciation Rate: 45.8%

• Unemployment Rate: 5.2%

• 1-Year Job Growth Rate: 3.1%

• Population: 5,700,000

• Median Household Income: $55,733

Atlanta Real Estate Investing 2016

As Georgia’s crown jewel, A-Town continued to be one of the hottest real estate markets to rebound in 2016. The previous year saw median home prices increase 6.2% to $167,800, while appreciation rates rose 6.2% during the same period, compared to the national average of 6.1%. The most encouraging Atlanta real estate news for current homeowners was appreciation rates. In the three years leading up to 2016, the home appreciation rate for the Atlanta real estate market gained an average of 45.8%, or $52,200 in equity, compared to the national average of 22.6%, or $39,833.

Atlanta Real Estate Market: 2014 Summary

In compiling a list of the markets most impacted by the Great Recession, one would be hard-pressed not to include Georgia, and specifically the Atlanta housing market. While the downturn was not as publicized as Detroit, it was one of the most damaged markets by the bubble bursting. Subsequently, the decline was due, largely in part, to an “economic fluke.” The city experienced such an influx of new homes before the downturn that the overwhelming new supply kept prices from inflating. In other words, they never experienced the upside of the bubble. Therefore, the Atlanta housing market witnessed prices decline as much as 40.0%, but from non-inflated levels.

Atlanta Real Estate Investing 2014

As much as the Atlanta housing market was crippled during the recession, it made significant improvements by 2014. According to Atlanta real estate news outlets, gains in the previous years helped pull the local market out of the post-recession price weakness. Home values improved dramatically in just a few years. In fact, Zillow forecasted home values to increase by as much as 4.6% over the course of 2016. According to several indicators (sale-to-list price, price cuts, and time-on-market), Atlanta was a “warm” market that favored sellers more than buyers, which was great news for local real estate investors.

Atlanta County Map:

Atlanta Real Estate Market Summary

The Atlanta real estate market has rebounded well from the Great Recession. For nearly a decade, in fact, real estate in Atlanta has improved year-over-year in just about every economic indicator. Nonetheless, even Atlanta couldn’t avoid the impact left by the Coronavirus. “Shelter-in-place” orders have temporarily stalled the momentum Atlanta has built up over the years. Still, it’s only a matter of time until the city returns to normal and perhaps even surpasses where it was entering into 2021.

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