National headlines have everyone pointing towards a “housing bubble” or real estate crash. There are countless news stories, blog postings and interviews covering the impending burst of the bubble. Just glance at these Google search results for an example of the chatter about housings bubbles. However, the Atlanta real estate market seems to exist comfortably outside of the bubble.
How can this be true?
Here are 5 Reasons there is No Housing Bubble in Metro Atlanta:
1. New Building Permits Lead the Nation:
In the first five months of 2006, the 28-county Atlanta area led the nation in the number of residential permits, with an 11 percent increase in the 10-county metro area. If pace continues, this will mark the 13th straight year that Atlanta MSA has led the nation in issuing residential building permits.
2. Average Sales Prices are on the Rise:
Average sales price of a home sold in the second quarter was $219,770, compared with $206,016 during the same time last year, a 6.7 percent increase. Sales may be a bit slower, but prices continue to rise.
3. Appreciation has been Steady, not Inflated:
Annual home appreciation has remained low in Georgia, with an average annual increase of 6.5 percent. That ranked Georgia 41st out of 50 states. Nationally, annual home price appreciation has been 12.5 percent. In Atlanta, the number is even lower, at 4.8 percent annually. With no spike in recent years, there should be no need for a price correction.
4. Strong Job Market and a Low Cost of Living:
Unemployment rate is 4.9 percent, right at the natural rate. Tech jobs are on the rise and cost of living remains one the lowest in the nation amongst major cities.
5. Industry and Community Leaders remain Positive:
Pick up a local paper and you’ll read quotes like these every week:
“One of the advantages the Atlanta marketplace has is that it is still a relatively affordable market.” – Casey Hill, division president for Pulte Homes Corp.
“I know we have all read about the cooling-down of the housing market in many areas of Georgia. Just the opposite is true in Marietta; our housing market is great.” – Bill Dunaway, Mayor, City of Marietta
Housing permits continue to climb, “and that’s a good indicator of where the direction of supply is going and whether builders are confident to put money in the game.” – Jeff Humphreys, director of economic forecasting at The University of Georgia’s Terry College of Business
“Our market is extremely healthy for us.” – Martha Hayhurst, senior vice president of Harry Norman, Realtors
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