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Sarah Dorio

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Should you buy a home in Atlanta in 2020?

“People love gentrification, as long as it’s not happening to them”

Talk to recent Atlanta homebuyers and you’ll hear a mix of experiences. Some have struggled with nerve-wracking bidding wars and unaccepted offers, while others are the benefactors of equity windfalls. And then there are the increasingly rare first-time buyers who’ve managed to seize whatever’s left of the American dream.

Not so long ago, as the city began shedding the Great Recession’s malaise, the question of whether it made sense to buy a home for yourself in Atlanta was, in many cases, a no-brainer. Values seemed destined to appreciate for those who could—or who wanted to—take on mortgages. And in the vast majority of city neighborhoods, especially on the eastside, prices have gone up.

But after roughly a decade of economic upswing, whether it’s a smart move to buy property now isn’t as clear. We asked nine experts—keen observers of intown Atlanta, all—to wade through the thorny and complex answers to the ever-present question: Should you buy a home in Atlanta this year? They leaned on current data, personal experiences, and strong opinions to create arguments for and against—or something in between.

We collected the responses below before the outbreak of novel coronavirus in the U.S. How might its spread impact the housing market this year? Read this.

Saba Loghman

Director of acquisitions, Empire Communities (formerly EA Homes)

We’re in the early stages of Atlanta becoming a dense metropolis. With this comes profound assurance for homebuying.

The city’s population is expected to triple, and the metro area is expected to add 2.5 million people by 2040. Pacing with this, we’re seeing strong job growth. Atlanta has 15 percent more jobs today compared to the pre-Recession peak, our GDP has increased 32 percent since 2012, and we’re expecting to add 305,000 jobs by 2030.

We’ll continue to see an increase in demand for homes. This demand is met with low inventory (currently 2.6 months of supply) and a constrained market, driving a sustained upward trend in home prices. Only 25,800 single-family units were permitted in the last 12 months, compared to 30,000 to 60,000 or more annual permits between the early 1990s to 2006.

Twenty twenty is an advantageous year to buy a home, as supply in the near future is not increasing to accommodate our growth. We also have the competitive tailwinds of millennials moving into prime homebuying age, homeowner equity approaching an all-time high, and incomes rising faster than home prices for the first time since 2012.

Let’s also not forget the 30-year mortgage has swiftly declined from 4.8 percent last year to 3.5 percent today, making buying in 2020 more attainable compared to previous years.

Ben Harris

Realtor, Ansley Buckhead; Ansley Atlanta

When you consider the most important factors in considering whether or not to buy a home, all of the leading market indicators point to a resounding, “Buy!”

The overall robust national economy has resulted in consistently high consumer confidence index numbers, which is important to support the housing market. These two factors work in unison to build a solid foundation for current home values and continued expected rates of appreciation, making this an extremely opportunistic time for potential buyers to enter the real estate market.

Perhaps the greatest driving factor of all are near record-low mortgage rates. Ken Folds, vice president of mortgage banking with CenterState Bank, is seeing 30-year fixed rate notes in the low to mid 3 percent range, and forecasts predict that these record low rates will remain available for at least the first two quarters of 2020.

Kit Sutherland

Former Fourth Ward Alliance neighborhood association president who’s lived across the street from Ponce City Market for nearly two decades

I do love Atlanta dearly and always will. I would certainly urge people to relocate here and—if they can afford it—to buy homes. The challenge would be identifying where to buy, since Atlanta has so many neighborhoods in dramatic evolution right now.

As much as I love the Old Fourth Ward, I think sales prices here have reached unsustainable levels, such that a “market correction” (such a nice euphemism) is inevitable. The question is, when might that happen, and how bad could it get? If I were a prospective buyer, with money in hand and a stable life/work situation, I think I would shop around extensively, then wait for prices to drop in a neighborhood that I had identified as desirable (for me) in terms of location, walkability, character, and so forth.

I would not suggest that anyone buy property in 2020 just as an investment (meaning, because you’re convinced you could resell it at a higher price in the foreseeable future). In general, I think doing so is just too risky; prospective buyers should buy what they like and can afford, in a neighborhood that suits them, with the understanding that they might be there a long time.

Bob Callner

Home renovator, Callner Properties president/owner

Yes! Definitely buy a house in 2020. Here’s why:

Like most people, when I bought my own home in Atlanta, I was very nervous. Is it the right time? Will values drop and I’ll lose my equity? I jumped in and relied on historical data that says owning a home is still one of the best places to build wealth.

Interests rates are insanely low. I remember buying a house when the mortgage rates were at 18 percent. I swear! And I didn’t charge it on my Visa card. I found an amazing deal at 12 percent and was so excited. And now, forecasters say mortgage rates for 2020 should average around 3.7 percent.

Atlanta is the place to be. It continues to outgrow and outpace the nation’s best-known metropolitan regions. It’s consistently ranked as one of the top cities for economic growth, transportation access (airport), Fortune 500 headquarters, top sports facilities, world-class educational institutions, mild weather, and the list goes on. All qualities that make it a desirable place to live with a strong job market and low cost of living.

I believe housing demand will stay strong, making homeownership in Atlanta a solid investment.

“There are a lot of people who really do want to buy a home as a way to set down roots in Atlanta, and I wish them the best. But for everyone else who’s looking to make a quick buck, and move on to [another] real estate project, you’re doing nothing to preserve the history and legacy of Atlanta, nor are you doing enough to actually help Atlanta.”

—King Williams

King Williams

Host of The Neighborhood Watch Podcast; director of The Atlanta Way: A Documentary on Gentrification; and author of iamkingwilliams newsletter

“Where is gentrification going to happen next?” That’s one of the five most asked questions I’ve been asked, and my reply is always, “I’m not your personal Realtor.” My experience: People love gentrification, as long as it’s not happening to them.

This year we need to do a better job, myself included, on explaining the differences between gentrification and revitalization.

There are also a lot of people who really do want to buy a home as a way to set down roots in Atlanta, and I wish them the best.

But for everyone else who’s looking to make a quick buck, and move on to [another] real estate project, you’re doing nothing to preserve the history and legacy of Atlanta, nor are you doing enough to actually help Atlanta.

Bryan Gates

Realtor, Bryan Gates Realty; PalmerHouse Properties

In my opinion, Atlanta is behind the curve in comparison with all the other major metro areas. The numbers fell here tremendously when everything came to a stall with the big R.

Commercial real estate continues to thrive at a high rate for opportunity-zoned areas, which helps create live, work, and play environments, or in other words, sustainability for communities to enjoy their neighborhoods. It’s a great time to buy with the interest rates low. There’s not a lot of inventory for every price point, but that comes with the territory, or how times have come to be in subareas, which plays a major roll.

Ben King

Columbia Residential project manager, focusing on affordable housing development

It’s basically impossible to not to be a gentrifier because of how the housing system is set up. We have a metro-wide housing shortage, and it doesn’t matter if you rent or buy.

Even if you don’t move into a “transitioning” neighborhood and end up changing that community, you are bidding up rents or home prices wherever you do move. Whoever you outbid will end up moving to the transitioning neighborhood, and they’ll do the same to someone else.

The only way to not contribute to this dynamic is to work on reforming the system to build more units. The research is clear that the best way to prevent displacing existing residents and to reduce prices on housing is to build more units—both at the neighborhood level and at the metro level. Fixing the system means reforming zoning and incentives systems, investing in transit to eliminate parking costs, and subsidizing below-market units.

Patrick Peyer

Decatur-based Realtor, Keller Williams Realty Metro Atlanta

The spring market has started early this year, with many properties receiving multiple offers as buyers look to take advantage of interest rates that have dipped to under 4 percent and sellers vying to take advantage of low inventory levels.

In the Atlanta market, there is currently 2.7 months of supply, and a balanced market is six to seven months. That means that, at the current rate of home sales, it would take less than three months to sell every home on the market if no new homes were listed.

If you feel you’re up for the challenge, there’s no time like the present when it comes to buying property in the ATL. Strong appreciation for the past eight years has pushed values higher than many buyer’s budgets, but rents have also increased.

Are we at the top? Don’t bet the farm on it.

The median sale price increased from $272,000 to $287,500 in January 2020 compared to January 2019. That’s a 5.7 percent increase, which is higher than the national historic average of 4 percent, but our home prices are well under many major metro cities.

Strong consumer confidence, low unemployment, and booming industries in Atlanta all suggest that this trend will continue for the foreseeable future.

Deanna Kansas

Realtor, Atlanta Fine Homes Sotheby’s International Realty

Yes, buy (and sell) in 2020. Buying a home is an important life decision; so is selling one. Good news: 2020 is a good time to do both.

How could that be? Low interest rates, a strong local economy, and continued population growth strengthen demand. Pricing, interest rates, and a good economy also make builders happy, increasing supply. Of course, not every submarket is the same, but overall, Atlanta is doing very well.

According to our 2019 data, closings for single-family homes were up 4 percent, with condos/townhomes remaining flat. The price of single-family homes was up 4 percent, while condos/townhomes were up 6 percent.

Single-family home inventory was down 3 percent, while condos/townhomes were up 23 percent. Downtowns and hubs within suburbs will outperform the overall market, with buyers favoring more densely developed communities that include restaurants and retail.

In 2020, the price of entry-level homes will continue to grow faster than incomes. Low interest rates and a shortage of starter homes will continue to push up prices. This is especially the case for lower price points, since builders have tended to focus on more expensive, higher-profit houses and less on replenishing low inventories of entry-level homes.

“I would say we’re potentially going to lose a generation of community members, because the baton that should be passing is in this age range now, where they begin to be rooted in place, being neighbors to one another, trading in the community. Sadly, that’s not the case; that’s not what’s happening.”

—Donell Woodson

Donell Woodson

Board member with Historic District Development Corporation, one of Atlanta’s oldest surviving community development groups, which aims to preserve affordable housing in Old Fourth Ward

I get asked this question when I’m traveling around the country, doing training and consulting. I get asked about Atlanta’s housing: Is it a good time? What do you guys do in response to the monster of gentrification, and the monster of the real estate market? I think it is always the best time to buy, and always the worst—that’s my response. You’re never going to find a perfect or ideal mix of the two with a growing and changing city. What we’re discovering is, the ability to develop housing for all has to lead. And the decisions have to be made with all at the table.

What we’re not saying, to be blunt, is that gentrification is horrible. We’re saying that when you have a comprehensive plan and approach that’s all-inclusive of everyone, gentrification can actually benefit a place. But when it’s a plan for developing the neighborhood without those original neighbors, or a variety of options for everybody, then it’s going to become exclusive, even if that’s not your intent. This is what the real estate market is doing, building and selling for transplants coming into the neighborhood. Not for those who actually live in the neighborhood. So this is the issue with [the question] “Is it a good or bad time to buy?”

For those living in the neighborhood, it’s a horrible time, because no one’s considering what housing—or scale of housing—looks like for them. Everyone’s building it for those coming, or just to see a return on investment, and then expecting people to be able to afford to live here. The builder sets the financial bar for what housing will be. We’re seeing that on the ground, where even our bartenders and our waiters in these new restaurants and apartments can’t afford to live in the neighborhood.

Preservation, restoration, and development—if these three groups can come together, it would be the best of times to buy housing in the city. We’re not just thinking about cookie-cutter development. Most of the time the market is forcing us in one direction—building only high-end. That just isn’t going to win. That makes it the worst time. We’re going to continue hemorrhaging “legacy residents”—that’s the kind of PC thing to talk about, those people who’ve been here so long. But the young people getting moved out, that’s a gray area.

From young people, I’m hearing that they can’t afford Atlanta. That’s the overwhelming response of people in the city. Sadly, they’re like, “We don’t have an option; we can’t go back to the suburbs where our parents are because it’s gotten to reflect the city in terms of pricing there.” That inability to find housing that gives them the option to enter into homeownership, they can’t afford it, because of how fast we’ve scaled in the past three years. Overwhelmingly, that’s the issue; they feel the only option is to just not live here. Which means, also, not work here either, because once they leave the city it’s not worth it to commute back in.

I would say we’re potentially going to lose a generation of community members, because the baton that should be passing is in this age range now, where they begin to be rooted in place, being neighbors to one another, trading in the community. Sadly, that’s not the case; that’s not what’s happening.

Interview responses have been lightly edited for length and clarity.

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