Atlanta Real Estate Market Forecast 2023

The Atlanta real estate market has been hot for several years now, so investors would want to know if it is still a good investment in 2023.

Read on to find out more about the following: 

Table of Contents

1. 5 Key Factors That Drove the Real Estate Market in Atlanta, GA in 2022
2. Atlanta Real Estate Market Statistics and Trends From 2022
3. Atlanta Rental Properties Trends From 2022
4. Atlanta, GA Real Estate Market Forecast for 2023
5. Should You Invest in the Atlanta, Georgia Real Estate Market in 2023?
6. Invest in the Atlanta Real Estate Market With the Help of Mashvisor

Before we go in-depth with our analysis, here is a quick overview of the Atlanta real estate market. The Metro Atlanta housing market seems to be recovering smoothly from the pandemic. Just a little over a month in 2023, the city is now home to 1.55% more residents from 2022 and about 50% more from 20 years ago.

The median price of houses sold in 2022 was $419,000, according to Realtor.com. Zillow placed Atlanta 2022 home values at $400,541, a 13% year-over-year increase. 

The investors’ main concern is the supply of houses for sale. Due to low supply and high demand, prices skyrocketed for most of 2022 until the markets started to cool down in the latter part of the year.

In this article, we’ll take a closer look at the Atlanta real estate market’s performance this year, including:

• The key factors that affected the real estate market in the city
• Trends in Atlanta’s housing demand, price, and supply
• Rental properties’s performance in the area
• Atlanta real estate market forecast 2023
• Is investing in real estate in the Atlanta market a good idea?

5 Key Factors That Drove the Real Estate Market in Atlanta, GA in 2022

Before going through the Atlanta real estate market forecast for 2023 and what experts believe will impact the Atlanta, GA real estate market this year, let’s take a look at 2022. The things that took place in the Atlanta market last year all contribute to how it will perform this year. Let’s go over five key factors that drove the 2022 Atlanta real estate market. 

1. Population Growth

Back in 2020, The Atlanta Journal-Constitution reported that Metro Atlanta was among the top five fastest-growing large cities in the US. From 2010 to 2021, its residents grew by 13.58%, from 5.30 million in 2010 to 6.02 million in 2021. At the time of writing, Atlanta’s population is about 6,106,000, up 1.55% from 2022.

Most of the migration is made possible by Georgia consistently ranking as one of the best states for business. Area Development named Georgia as the number one state for doing business in 2021. They cited its “longstanding momentum regardless of the business cycle, the pandemic, or policy changes” as the reason.

Atlanta was a great place to start a rental property business in 2022 mainly because it offered investors the right mix of quality of life, affordability, and job opportunities. 

Quick Stats

• Metro Atlanta is the most populous city in the state and the seventh-largest metropolitan area in the country.
• DeKalb, Gwinnett, Fulton, and Cobb are some of the most populated counties in the area.
• The median age of residents in Atlanta is 33.3 years, with a little over 40% of the population between the ages of 20 and 49.

2. Growing Economy and Job Market

Atlanta was an economic bright spot in the US in 2022. Finance and tech firms flocked to the city in the past year and opened doors for job seekers from within and outside the city. While Atlanta is home to a diverse makeup of headquarter firms, such as Coca-Cola and CNN, it’s the tech sector that brought in the most jobs at 1,440 openings (+10%).

As of December 2022, Statista showed Metro Atlanta’s GDP for fiscal year 2020-2021 at $$399.13 billion. The Federal Reserve Bank of Atlanta estimates the city’s GDP to be up 2.1% as of February 7, 2023. Their estimate is based on subsequent releases from the US Census Bureau and the US Bureau of Labor Statistics.

Employment growth in the area is projected to reach 0.7% annually. The current average household income in Atlanta is $106,300. Meanwhile, its unemployment rate is at 3% (as of December 2022), according to data from YCharts.

3. Quality of Life

Atlanta consistently ranks as one of the best places to live and one of the best places to retire in the country. As one of the nation’s fastest-growing metropolises, it’s been attracting newcomers from all over the country who are looking for a mix of culture and commerce. 

According to Nerdwallet’s calculator, the cost of living in Atlanta, GA is 2% lower than the national average.

4. Tourism

As we go further into the post-pandemic era, Georgia’s travel industry is poised to keep its momentum in 2023, after making a very big comeback in 2022. It was the only US city to be featured in Lonely Planet’s Best in Travel 2022 list. 

However, while the coastal areas and the north Georgia mountains saw their beach houses and condos booked quickly last year, most of Atlanta is still trying to recover its lost momentum from the pandemic.

5. Housing Affordability

Atlanta’s real estate market is one of the most affordable compared to other similar metro areas in the country. The overall cost of living and the availability of cheaper land are some of the major factors that make housing affordability within reach of the city’s residents. 

The housing affordability, along with the other abovementioned factors and economic conditions, makes Atlanta one of the best cities to buy real estate properties in for in 2023. 

Atlanta Real Estate Market Statistics and Trends From 2022

Axios provides Atlanta real estate market news and statistics about Metro Atlanta based on how industry experts interpret the current market conditions. According to the current statistics and conditions of the Atlanta housing market, there will be no housing market crash in the area this year. 

How were they able to make predictions like the above? Well, they took a look at 2022’s stats and trends and made calculated projections. Below is a summary of what 2022 looked like for Atlanta’s real estate market:

Housing Demand

An Atlanta real estate market trend we should look at is housing demand, which is measured by the number of home sales. Residential sales took a significant hit from high property prices and mortgage rates in 2022.

It is likely that high-interest rates froze buyers in place to acquire their own property. Despite the market cooldown, the high mortgage rates are preventing residential property buyers and real estate investors from pulling the trigger on seemingly worthwhile purchases. 

2022 ended with a slight drop in housing demand as many real estate agents sought out creative solutions for their clients. Despite the decline in demand, Atlanta is still considered one of the country’s hottest markets for 2023 as it is ranked ninth by Zillow on its list.

Home Prices

The widening gap between housing demand and inventory triggered an upward trend in housing prices, which also impacted affordable housing in the Atlanta real estate market. However, going into Q3 2022, several real estate markets started to cool down. It meant that the rate of price increases slowed down a bit.

The median price in January 2022 was $579,377 and continued to rise to $618,119 in June 2022. The upward trend reflected the inventory shortage, which remained historically low. The median price began to go down from July ($610,007) to September ($600,184). The decline was likely due to buyers pulling back because they were either priced out or want to wait it out.

By the time 2022 ended, Atlanta’s median housing price was at $570,788.

Housing Supply

As far as housing supply is concerned, experts consider the residential market to be balanced if the number of listings is equal to six months of sales. Anything lower than the said figure becomes a seller’s market. If it’s higher, it becomes a buyer’s market.

Going into 2023, Atlanta’s residential market currently showed slightly more than two months’ worth of supply. The COVID-19 pandemic was one of the main catalysts of the said housing market shortage that started in March 2020 and was still strongly felt throughout 2022:

• Homeowners were reluctant to sell their houses during the pandemic; and,
• The government’s mortgage forbearance prevented homes from getting foreclosed on or being forced to sell by homeowners who could not pay their mortgages.

In addition, they said that the consequences of the 2008 housing market crash were still felt many years later:

• Fewer houses were built compared to historical averages;
• The housing crash destroyed the building industry and pushed construction workers onto other jobs;
• Local building restrictions and neighbor objections slowed down new construction;
• Strict immigration policies further reduced the labor supply in the building industry; and,
• The previous administration’s tariffs pushed up the cost of building materials.

The question now is how is the real estate market in Atlanta GA currently, given the present conditions and trends? Because of the low supply and rising prices, many homebuyers are staying put because they cannot find a house they want or they cannot afford it because of high mortgage rates.

One thing to note is that new construction of residential units needs to be carried out to keep up with the current demand. Even then, it will still be a few months short of the ideal number to maintain a healthy residential real estate market balance in Atlanta.

Atlanta Rental Properties Trends From 2022

Our Atlanta real estate market analysis would not be complete without looking at the past year’s trends and statistics of rental properties:

Long Term Rental Properties

Since 2015, at least 50% of houses in Atlanta have been renter-occupied. As housing prices went up, rent prices from March through May 2020 fell 2.2% compared to the previous year. 

By June 2021, however, the average rent matched 2019 prices, surpassing it ever since. As of December 2022, the average rent for a single family unit is $1,712.

According to an Atlanta real estate market report from Atlanta Business Chronicle, millennials and Gen Z’ers, who make up 42% of the population in the metro, cannot afford to become homeowners. It is because of the rising prices of homes for sale. So, instead, they look for single-family homes to rent.

Airbnb and Other Short Term Rental Properties

Using Mashvisor’s data analytics feature, we found that Atlanta Airbnb and other short term rentals are slowly recovering. In 2019, the Airbnb occupancy rate was 45.7%. It even rose to 48% in December 2020. As of November 2022, however, the occupancy rate was down to 43.31%. It plummeted even more in December 2022 as the occupancy rate was only at 37%.

In terms of income, the daily rate increased from $160 in January 2022 to $173 by year’s end. Despite the lower occupancy rate, the increase in daily rate shows how much tourists are willing to pay for a socially distanced getaway after being stuck at home for a year.

Lastly, the number of active short term rental listings in Atlanta as of December 2022 is 6,339, up from 4,186 during the same period last year. Airbnb investors are counting on the economic recovery in the city to also boost tourism, so many are either uploading new listings or reactivating their properties.

Atlanta, GA Real Estate Market Forecast for 2023

For the year 2023, the main concerns would be the housing shortage and the increase in prices. Will anything happen that can disrupt the said trends? 

Here are some of our forecasts on the Atlanta residential real estate market this year:

Real Estate Appreciation Will Continue

The typical value of a residential real estate in Atlanta is $477,000, which is 11.7% higher than last year, according to Norada Real Estate. Our forecast is that in 2023, the Atlanta real estate property market value will still continue to increase but at a much slower pace compared to the previous year. 

Because of the current shortage of houses for sale and steep mortgage rates, many homebuyers cannot afford the property they want, forcing them to put their search for residential properties on hold.

Affordability Will Still Be a Problem

The median home price in Atlanta is $569,488 as of January 2023, which is 20.61% higher than the national median ($472,156). Housing demand dropped 23% year-over-year in September 2022, and the Atlanta Realtors reported that it was due to higher property prices and mortgage rates.

Foreclosures Will Not Affect the Market

When the federal moratorium on foreclosures expired on July 31, 2021, many were concerned that the market would be flooded with foreclosures. However, the Mortgage Bankers Association reported that 77% of homeowners that exited the forbearance already had a loss mitigation plan:

• 27.6% deferred their loans or made partial claims
• 24% continued their mortgage payments
• 15.3% had their loans reinstated
• 10.2% had their loans modified

According to the Atlanta Agent Magazine, one in 3,421 housing units (0.03%) in the state filed for foreclosure in the third quarter of 2021. The figure will not be enough to replenish the low inventory of houses for sale and cannot temper the rising home prices. However, our forecast is that the said slow and steady increase in foreclosure is not enough to negatively impact the Atlanta real estate market.

Demand for Rental Properties Will Get Stronger

Because of the low inventory of houses for sale, increasing property prices, and high mortgage rates, those who move to Atlanta may opt to rent instead. It will also cause the rental rates to increase. Additionally, more tenants would want to live in condos and in urban areas again, as establishments like bars and restaurants resume their operations.

More companies now require their employees to go back to the office as well. So those working from their home in the suburbs during the pandemic might want to rent an apartment near their workplace. If you own an Atlanta investment property that you lease out, you can expect more income this year.

Airbnb Atlanta and Other Vacation Rentals Will Eventually Recover

As restrictions were lifted and nearly every business was resumed, Atlanta will welcome more leisure travelers, especially in the summer and fall this year. It means that Airbnbs in Atlanta, even the ones located downtown and in other urban areas, will inevitably get more bookings. 

Atlanta, GA by the Numbers

We took a look at real estate website Mashvisor to see what Atlanta, GA can offer investors looking to buy Atlanta houses for sale. With the help of its January 2023 data, we’ve found the following information that is crucial for those looking for potential Atlanta investment properties in the area. 

• Median Property Price: $569,488
• Average Price per Square Foot: $1,870
• Days on Market: 88
• Number of Long Term Listings: 2,561
• Monthly Long Term Rental Income: $2,816
• Long Term Cash on Cash Return: 4.31%
• Long Term Cap Rate: 4.38%
• Price to Rent Ratio: 17
• Number of Short Term Rental Listings: 6,345
• Monthly Short Term Rental Income: $1,682
• Short Term Cash on Cash Return: 0.21%
• Short Term Cap Rate: 0.22%
• Short Term Daily Rate: $173
• Short Term Occupancy Rate: 36%
• Walk Score: 43

Should You Invest in the Atlanta, Georgia Real Estate Market in 2023?

Based on the above forecasts, property investors like you would wonder if next year is a good time to invest in the Atlanta real estate market. 

The answer is yes. 

The metropolis remains one of the top real estate markets in the country where rental properties are concerned. Turnkey properties are being constructed, with several hundred units becoming available for sale next year, according to Multi-Housing News. A lot of the properties, when invested, generate a cap rate of up to 10%.

It is also a good sign that the Atlanta Regional Commission projects that 1.2 million jobs will be added by 2050 and that the population will grow to 2.9 million people by then.

If you want to know areas that can provide lucrative investment opportunities, here is a list of Atlanta real estate markets by neighborhood that you can look into based on your preferred rental strategy:

Top 5 Atlanta Neighborhoods for Long Term Rental Investment in 2023

According to real estate website Mashvisor,  the following Atlanta real estate neighborhoods make for ideal long term rental investment locations based on its January 2023 location report. The list below is filtered using the following criteria: 

• Each real estate market must have a median property price of less than $1,000,000
• Each neighborhood should have a minimum monthly rental income of $2,000
• Each area must have at least a 2% cash on cash return

The following  list is ordered from the neighborhood with the highest to lowest long term rental cash on cash return. 

1. Brookwood

• Median Property Price: $372,175
• Average Price per Square Foot: $341
• Days on Market: 42
• Monthly Long Term Rental Income: $2,439
• Long Term Rental Cash on Cash Return: 4.97%
• Long Term Rental Cap Rate: 5.06%
• Price to Rent Ratio: 13
• Walk Score: 61

2. Loring Heights

• Median Property Price: $606,250
• Average Price per Square Foot: $382
• Days on Market: 15
• Monthly Long Term Rental Income: $3,402
• Long Term Rental Cash on Cash Return: 3.78%
• Long Term Rental Cap Rate: 3.81%
• Price to Rent Ratio: 15
• Walk Score: 51

3. Brookwood Hills

• Median Property Price: $428,300
• Average Price per Square Foot: $292
• Days on Market: 104
• Monthly Long Term Rental Income: $2,760
• Long Term Rental Cash on Cash Return: 3.12%
• Long Term Rental Cap Rate: 3.16%
• Price to Rent Ratio: 13
• Walk Score: 58

4. Piedmont Heights

• Median Property Price: $466,818
• Average Price per Square Foot: $1,454
• Days on Market: 36
• Monthly Long Term Rental Income: $2,205
• Long Term Rental Cash on Cash Return: 3.07%
• Long Term Rental Cap Rate: 3.14%
• Price to Rent Ratio: 18
• Walk Score: 64

5. Atlantic Station

• Median Property Price: $490,525
• Average Price per Square Foot: $632
• Days on Market: 87
• Monthly Long Term Rental Income: $2,613
• Long Term Rental Cash on Cash Return: 2.91%
• Long Term Rental Cap Rate: 2.96%
• Price to Rent Ratio: 16
• Walk Score: 90

Start looking for the most profitable long term rental properties in Atlanta, GA with Mashvisor today.

Is Airbnb Investing in Atlanta, GA a Good Thing in 2023?

Ironically, as hot a real estate market as Atlanta, GA is, investing in a short term rental might not be a good move for investors at this time. 

For one, the Atlanta real estate market’s vacation rental industry is already congested, with 6,345 active listings in the short term rental market. 

Second, because of the number of vacation rentals in the market, the cash on cash return on a short term rental property in the Atlanta real estate market is a mere 0.21%. 

Third, because of the cutthroat vacation rental market, the average monthly rental income Airbnb hosts and other short term rental owners get presently is only $1,682. The amount is far less than the $2,816 in monthly rental income Atlanta landlords get. 

Given the above conditions, our fearless forecast is you’re better off investing in a long term rental if you’re considering investing in the Atlanta real estate market. 

Invest in the Atlanta Real Estate Market With the Help of Mashvisor

If you feel bullish about the real estate market in Atlanta and want to invest, Mashvisor can help you find a lucrative investment property in that city. You can search our database containing hundreds of thousands of properties by typing in a city or neighborhood. You can then get a quick overview of the houses for sale in your chosen area.

If you find a neighborhood or property that interests you, you can click on it to find a more detailed analysis of the average rental income, cash on cash return, median home price, and more. You can also determine which rental strategy would work best in that area. You will not need to leave your home or call up an agent; research and analysis are just a few clicks away.

Get started on your 7-day free trial with Mashvisor today on your way to a thriving real estate investing career.

Conclusion

Real estate property is one of the biggest investments a person will make, not only for actual investors. It is why it is important to keep tabs on how the market in a certain area performed and how it may look in the future. 

To summarize this report, there are five key factors that will affect the Atlanta real estate market this year:

• Positive population growth
• Optimistic job market
• Quality of life improvements
• Slow recovery in tourism
• More affordable housing compared to other major cities

The above factors boosted the demand for houses as more people moved into the city. But because of homeowners’ reluctance to sell and delays in new construction, the low supply caused prices to skyrocket. As a result, the majority of buyers were priced out. 

While it is bad news for homeowners and investors looking to sell, it presents a great opportunity for those with rental properties in the area. New residents are likely to rent first while they wait out the market.

Based on the said trends, here are what we forecast will happen in the Atlanta real estate market in 2023:

• Property values will continue to appreciate but at a much slower rate.
• More homebuyers will have a hard time finding a house that they could afford due to higher mortgage rates.
• Foreclosures will not have a significant impact on the market.
• Demand for properties for lease will get stronger.
• Airbnb and other vacation rental properties will slowly recover their income.

Learn more about how Mashvisor can help you find the best deals in the most profitable markets by scheduling a demo now.