Like the state of Georgia, Atlanta has an unemployment rate higher than the national average (about 10.4 percent compared to 9 percent). The real estate market, specifically the slow down of new construction is said to be the problem according to Mark Butler, the Labor Commissioner.
Butler says that the recession hit just as metro Atlanta and Georgia were in one of the state’s biggest growth cycles, led by flourishing residential, commercial and industrial real estate development. When the real estate market and the economy took a dive, the over-leveraged construction industry collapsed.
“Our recovery is going to lag behind the rest of the nation,” Butler said.
What does that mean for the Atlanta real estate market and for investors? Zillow CEO Spencer Rascoff says that, “Similarly, many would-be sellers in today’s housing market are considering whether to become landlords rather than sell at a loss.”
The question then becomes what about Apartments in Atlanta and the rental prices? Zillow, rates Atlanta’s rental market as “fair” which isn’t good but which is better than a lot of markets. Rental prices have been on the rise, along with occupancy.
Speaking about how things have changed in the past couple of years:
“There was so much out there, so much available to lease, that apartment complexes and homeowners, they were giving things away just to get people in there,” said leasing agent Krystal Wilbanks. “But now, there are so many people out there renting, that it’s easier just to get them into the property, cause if you don’t take the property, the next person that comes and looks at it, they will take the property.”
Part of that, of course, is that there aren’t that many new apartments being built. You have to wonder how far behind the nation Atlanta is expected to lag considering that higher rental prices could bring a recovery in the construction industry and that would help solve the unemployment problem. Of course, until things start selling the construction industry will be fairly stagnant but increasing rent might be a sign that apartments will start selling eventually.