The housing market has recently been kind to Atlanta homeowners, especially those wise or lucky enough to have inked mortgages six or seven years ago. Equity sums in the hundreds of thousands of dollars are as common as summertime crepe myrtle blooms.
But for homeowners not planning to leave Atlanta—or to uproot to some cheaper part of town—is it all a wash?
So what your starter-home, two-bedroom boat is riding a price-surge tsunami. The four-bedroom relative yachts are surfing the same wave, with engines cranked.
New findings by Realtor.com—leaning heavily on CoreLogic and U.S. Census Bureau data—could be troubling for Atlantans in condos and smaller houses itching to trade up for more space, especially as interest rates are notching long-rumored rises.
With its infamous income inequality and ballooning prices for new-construction housing, Atlanta is the 10th most difficult U.S. market for trading up, researchers found.
And the study kept the hypothetical “trading up” within reason—not jumping from a postwar cottage to a modernist Midtown palace. Starter homes were considered the bottom 40 percent of properties in terms of price and size; trade-up homes were the middle 40 percent. Above that, premium homes.
“A widening price gap [in Atlanta] between entry-level and mid-level homes is making trading up financially out of reach for many folks jonesing for even a tad more space,” writes the website.
The numbers look rather stark. In Atlanta, there’s a 242 percent difference between the median price of starter homes ($139,900, which includes condos) and trade-up properties ($339,000).
As Atlanta Agent Magazine notes, this isn’t necessarily a bad thing in all cases.
“In today’s competitive landscape, moving up from [starter homes] to the white picket fence has become increasingly tough,” said Javier Vivas, manager of the Realtor.com economic research team, per the magazine. “This isn’t particularly unhealthy for the market, since it stops some irrational buyers. But it can leave out a large crowd of buyers who are financially ready.”
This is America, after all, so each neighborhood in each city is its own special case. But some common factors could be having a local impact:
- insufficient new-home construction is driving a buying frenzy, kicking prices even higher;
- homeowners don’t have quite enough equity to finance the higher mortgages they want;
- investors and foreign buyers who can pay cash are skewing the playing field, putting regular old starter-home sellers at a disadvantage.
So what’s the good news for Atlantans itching to move on up?
Realtor.com’s staff suggests buyers consider Sandtown, a walkable and “historical neighborhood going through massive redevelopment [that] boasts an abundance of decent-sized trade-up homes at reasonable prices.”
For those unfamiliar, Sandtown is positioned OTP off Fulton Industrial Boulevard, pretty much due south of Six Flags Over Georgia.