As spring quickly turns into summer, the Atlanta housing market is continuing to grow. However, a story reported by the Atlanta Journal-Constitution indicated that the growth has slowed to fall under the national average, according to a survey released last month.
Homeowners report the average cost to build a new house comes in at $305,372, which would put a 2,000 square foot home costing about $150 per square foot. But according to the S and P/Case-Shiller House Price Index, the average price of a home in the Atlanta metropolitan area increased 5.6% in the last year.
Real estate experts fear that the market strength is particularly lacking in the lower price ranges.
“While the housing market looks to be recovering, these high prices impact the affordability of homes, directing the strongest headwinds towards starter-home buyers,” said Cheryl Young, senior economist for San Francisco-based online housing data resource, Trulia.
Metro Atlanta home prices rose .4% in the past month, but when adjusted for normal season trends, the prices increased to .8%.
Experts also predict that the market has the possibility to become even stronger, if renters eventually decide to own, and according to Bruce McClenny, president of Apartmentdata.com, Atlanta in particular has a vast number of potential buyers.
“People in the home market look to rentals as their next customers,” he said.
Of course, it isn’t always easy for renters to get out of the renting cycle. For some, it’s just a matter of preference, but for many, it’s the only viable financial option.
“The debts that so many people have, the higher loan quality standards since the Great Recession. It made it easier to say, ‘We’re going to choose to be renters,’” said McClenny.
For those with lower incomes, saving up a down payment of 10% can seem like an impossibility, according to McClenny. “And the other thing working for rentals in Atlanta is that the housing market is just so strong. You have prices (in the past year) up more than 10 percent,” he said.
Aside from the aspect of paying the mortgage and utility bills on a new home, there’s also the premise of filling it with furniture. Some furniture, such as sofas, can last up to 15 years or more, but other types can need replacing faster than homeowners realize — especially first time homeowners.
Another cause for the shift could be the increased demand for homes with outdoor accommodations, especially in areas with warmer climates. About 96,000 houses with patios were sold in 2014, up from 59,000 houses in 2010.
For those who are looking to sell their homes, the survey results indicate that now may be an opportune time. And if any homeowners are having trouble closing the deal, home staging can be very effective – a 2013 study showed that staged homes were sold in 22 days, compared to the average market time of 125 days for homes that were not staged.
Ultimately, McClenny thinks all renters have a point where they make the leap and become homeowners.
“When you get married, have kids — that is typically the point.”