Highlights from this housing report:
- Home prices in Atlanta have risen steadily over the past few years.
- A new forecast for the Atlanta housing market predicted more gains for 2020.
- Inventory is still tight in the area, putting upward pressure on prices.
- The metro area’s population, meanwhile, has swelled in recent years.
We’re about to enter the last two months of the year, and that means many Atlanta-area home buyers are looking ahead to 2020. And they share some of the same questions:
What will the Atlanta, Georgia real estate market be like in 2020? Will prices keep rising? Will it be a good year to buy a home in this area?
Here are some recent data and trends to help you make an informed purchasing decision.
A Strong and Stable Economy
Local economies and housing markets tend to go hand-in-hand. When economic conditions are strong and stable, the real estate scene hums right along with it.
A good job market gives home buyers the financial capacity to buy a property and keep up with their monthly payments. Strong economies also attract new residents, fueling population growth and putting upward pressure on home prices.
According to the Federal Reserve’s latest “Beige Book” report (which looks at economic conditions in key regions across the U.S.), the Atlanta economy is doing quite well in 2019.
To quote that October 2019 report:
“The [Atlanta] economy expanded at a modest pace … Residential real estate activity improved, while nonresidential activity was stable. Manufacturing activity rebounded since the previous report.”
According to the Bureau of Labor Statistics, the unemployment rate for the Atlanta-Sandy Springs-Marietta metropolitan area was 3.5% as of August 2019. That’s down from a recession peak of nearly 11% during 2009.
These conditions bode well for the Atlanta housing market in 2020. So it’s no surprise to see some research groups offering positive forecasts for the Atlanta real estate market in 2020.
Positive Housing Market Forecast for Atlanta
The housing research team at Zillow, for example, recently predicted that home prices in the Georgia city would continue to climb through the end of this year and into 2020.
In late October 2019, the team at Zillow wrote: “Atlanta home values have gone up 5.2% over the past year and Zillow predicts they will rise 4.4% within the next year.”
This particular forecast stretches into the fall of 2020. Other forecasters have made similar predictions for this real estate market. The general consensus seems to be that the current supply-and-demand situation will keep home prices rising for the foreseeable future.
Atlanta has been singled out as one of the best housing markets for investors as well. Earlier this year, the property management software company Buildium ranked the city as one of the “up-and-coming real estate markets to watch in 2020.”
Significant Population Growth Bringing in Home Buyers
Like many big cities across the country, Atlanta currently has a shortage of housing supply relative to the demand from buyers.
Granted, this market is not as “tight” as some metro areas. And that’s good news for home buyers who plan to buy in 2020. But there is still a bit of a supply shortage in Georgia’s most populous city. And that’s one of the reasons why home prices continue to rise across the metro area.
The Atlanta area has experienced tremendous population growth over the past few years. According to the U.S. Census Bureau, the city’s population grew by nearly 17% from 2010 to 2018. To put that number into perspective, the U.S. population as a whole grew by 6% during that same eight-year period.
Earlier this year, the city was ranked as the eighth-fastest-growing large city in the nation. Separately, a forecast published by the Atlanta Regional Commission this year predicted that the metro area’s population would climb to 8.6 million by 2050. Currently, the Atlanta metro area’s population is around 6 million.
And all of those new residents need some place to live.
Population growth on this order tends to increase demand for housing, on both the rental and purchase side. It brings more home buyers into the market, increasing competition and boosting house prices.
That’s what we have seen over the past few years, in this housing market. And the latest forecasts suggest more of the same for 2020.
Low Mortgage Rates Give the Market a Boost
Thirty-year mortgage rates have been hovering below 4% (on average) since May of 2019. And they are expected to remain low for the foreseeable future. This is another factor contributing to the strong housing market conditions in Atlanta and elsewhere across the U.S.
According to the latest survey from Freddie Mac, the average rate for a 30-year mortgage loan was 3.75% as of October 24, 2019. That’s quite a bit lower than the start of the year, when 30-year rates were averaging around 4.5%.
Low borrowing costs are expected to be around for a while, and they might actually drop a bit in 2020.
In their latest “Economic and Housing Research Forecast,” the team at Freddie Mac made the following prediction:
“We project the 30-year fixed-rate mortgage to average 3.7% in the fourth quarter of 2019. We project the annual average to be 4.0% in 2019 before declining to 3.8% in 2020.”
Will 2020 Be a Good Time to Buy in This Market?
Getting to the big question on many people’s minds: Will 2020 be a good year to buy a home in the Atlanta area?
There are some personal considerations that go beyond the scope of this article. But from a real estate and economic perspective, 2020 could be a great year to buy a home in Atlanta, Georgia.
There are several reasons for this:
- The local economy is currently strong, with fairly high employment.
- Thirty-year mortgage rates are expected to remain low going into 2020.
- Forecasters predict that home prices in the area will continue to climb.
The bottom line is that Atlanta home buyers who postpone their purchases will likely encounter higher housing costs. Home prices have been rising steadily in this housing market for years, and they don’t show any sign of stopping in 2020. So a sense of urgency is probably warranted.
Disclaimer: This article contains forecasts issued by third parties not associated with the Home Buying Institute. Housing-related predictions are the equivalent of an educated guess and should be treated as such.