Real estate prices in Georgia hit bottom and are beginning to climb slowly but surely as the state emerges from the economic wreckage of the Great Recession.
In a March Marketplace Money article (“Atlanta real estate: Peachy keen or sour grapes?”), Atlanta Realtor Deborah Gilmore said, “we do have a heartbeat now. We had flat line for quite a while, but we are beating. That’s good news. Certain areas of Atlanta, where high-end is predominant, there are people buying.”
Statewide, inventory is down as well, according to Carol Moson, an Atlanta-based Realtor. “We are finding multiple bids, therefore bidding wars, in certain areas and certainly with foreclosures,” she recently wrote in Realty Times. “We are absolutely seeing positive signs of an improving market in Atlanta and the surrounding suburbs. Generally speaking, inventory is down considerably since last year and listing prices are up. In addition, the average days on market is slightly lower than last year. All in all it is what we have been waiting to see. It may be taking longer than we had hope but the great news is that the trending is very positive.”
Georgia residents are confident that the state is rebounding quickly. During a recent Georgia Economic Outlook series lecture, Robert T. Sumichrast, dean of the University of Georgia’s Terry College of Business, said the state’s economic growth is on track to outpace the national average in 2013. “There are two main reasons for Georgia’s improvement relative to the country,” he said. “First, the massive restructuring of the state’s private sector is now complete. Our real estate bubble is in the past. The second reason is the opening of several large relocation and expansion projects, which will provide a tailwind to Georgia’s economic growth.”
Sumichrast listed the following as sources of Georgia’s economic strength:
- State GDP will rise by 2.1 percent in 2013.
- Georgia’s population growth will exceed the national average at 1.3 percent, with a net migration of 61,000.
- Single-family home starts will rise by almost 20 percent in 2013.
- Personal income growth will outpace inflation by 2.1 percent.
- Nominal personal income will grow by 3.6 percent.
- About 53,000 jobs will be added in total.
- The newly created $100 million deal-closing fund will help economic development.
- The fastest job growth will be in professional and business services, followed by leisure and hospitality, then manufacturing.
Meanwhile, Jeff DuFresne, executive director of the Urban Land Institute, recently offered positive words about Georgia real estate’s future. This year, he said, “is going to be a year of progress. It will also have some uncertainties.”
DuFresne said some of the reasons Georgia will experience a real estate resurgence include tech companies and high efficiency call centers are pouring into Atlanta and other markets in the Southeast, which means employees need housing; investors have been amassing cash they are eager to invest in real estate; and the multifamily market is strong.
Atlanta InTown interviewed several Georgia Realtors in January regarding their projections for the 2013 real estate market. Here are some excerpts from those interviews: • So what will be the most popular properties in 2013? Atlanta Realtors are expecting the trend to continue in the same direction as it had been going last year.
“Single family detached homes with a minimum of three bedrooms and two baths seems to still be the most desired housing,” stated Lisa Johnson, Managing Broker, Coldwell Banker Intown office. “We’ve also seen a nice increase in the number of condos sold in the Intown and Midtown markets over the last year. All that being said, people purchase according to lifestyle needs and desires.”
The activity in single family homes and condos can be attributed to a variety of reasons. Mike Wright, Senior Vice President/Managing Broker at Harry Norman Realtors Intown Office, explained that single family homes have a great appeal to younger couples, especially those with families or planning to start a family. Condos, particularly those in the mid $200K range, are appealing to younger singles and couples looking for their first home, as well as older singles and couples looking to free themselves of the maintenance responsibilities of single family homes.
• “Both of these housing types are being affected by greater demand and fewer properties coming on the market,” he said. “The Intown neighborhoods have very few new construction single family homes and recently constructed condos are rapidly selling out, with the exception of ultra luxury units.”
Wright predicted that in 2013 the Intown real estate market will be almost exclusively resale. That’s good news for homeowners planning to sell. It’s worth knowing that some of the key amenities homebuyers look for are high efficiency systems, green construction materials, functional living space and higher end finishes. Outdoor rooms are also in demand right now, and well-designed kitchens and bathrooms are always important.
A November article in the Atlanta Business Chronicle (“Economist: 2013 another year of transition for real estate”) quoted economist Asieh Mansour as saying that Atlanta’s economic recovery has been hampered by only moderate growth in the global economy. “In Atlanta you are not immune to what is happening in the global markets,” Mansour said.
However, she added, U.S. consumers are regaining confidence in the economy, which should benefit Atlanta’s economy generally, and in terms of its real estate market.
Tina Hunsicker, of Atlanta Fine Homes Sotheby’s International Realty, blogged about the future of Atlanta real estate – at least through 2013 – in January. She wrote, “I see the lower inventory levels bringing prices up slightly, but I don’t think buyers will jump up in their price point as much as sellers are thinking. If you want to sell it will be easy if priced correctly. If you want to buy, you may have to pay a little more than people did a year ago, but we are still at good low levels. Interest rates are still so incredibly low you have to take advantage of them if you’ve been sitting on the sidelines.”
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