Property investors are already in search of the best places to invest in real estate in 2020. The Atlanta housing market has always been a hot spot for residential real estate investments attracting both domestic and foreign capital. But how is the Atlanta real estate market looking for 2020? Will it continue to be one of the top locations for rental properties? You will find the answers to these questions and many others in this article on the most prominent trends in the Atlanta real estate market forecast 2020.
What Are the Main Factors Impacting the Real Estate Market in Atlanta, GA?
To understand the Atlanta housing market predictions 2020, it is important to examine the drivers of Atlanta real estate.
Population Trends
Demographics is one of the most crucial factors affecting the growth and performance of any real estate market, and this is definitely the case in the capital city of Georgia as well. While the City of Atlanta has a population of about half a million residents, the Atlanta metro area is home to about 6 million people, which makes it one of the largest in the entire US housing market in 2020. According to PwC’s Emerging Trends in Real Estate: United States and Canada 2020 report, population will be the top driver of developments in the Atlanta real estate market 2020, a trend which is observed in other Southern best places for real estate investing such as Raleigh/Durham, Nashville, Charlotte, and Orlando. Indeed, Atlanta’s population is growing at one of the fastest rates nationwide.
Economic Growth
While Atlanta initially emerged as a result of a major state-sponsored railroad, it quickly turned into a diverse economy. Georgia’s capital retained its position as an important transportation hub and is currently hosting the busiest airport globally in terms of passenger traffic, the Hartsfield-Jackson Atlanta International Airport. In addition to transportation and logistics, other key industries include finance and insurance, professional services, medical services, sciences, media, retail trade, manufacturing, and aerospace. Atlanta is home to the HQ offices of a few major companies including The Cola-Cola Company, Delta Air Lines, UPS, and AT&T Mobility. Indeed, the capital of Georgia has the 3rd largest concentration of Fortune 500 companies among US cities.
Business Environment
The legal and regulatory environment for doing business affects the economic performance of a location in general and the development of its real estate market in specific. According to PwC, business friendliness including low costs and taxes for doing business is the second most important factor supporting the expected growth of the Atlanta housing market 2020. With regards to real estate taxes, the State of Georgia has a low property tax rate of 0.9%, while Atlanta real estate taxes are also not high compared to the national average.
Tourism Industry
Tourism is another important driver of a real estate market, especially in terms of Airbnb rental properties. All the necessary factors are in place in Atlanta to support the local housing market. Over 53 million visitors come to the capital city of Georgia on annual basis, which makes it one of the most popular tourist destinations in the entire nation. These visitors come for both the numerous tourist attractions in and around Atlanta and the business opportunities there. The end result from the point of view of real estate investors is high demand for Airbnb Atlanta investment properties and good Airbnb occupancy rate.
What’s the State of the Current Atlanta Housing Market 2019?
Before going into the details of the Atlanta real estate market forecast for 2020, let’s have a look at where the market is currently standing. The numbers below are provided by Mashvisor’s investment property calculator and are based on big real estate data and rental comps:
Atlanta Real Estate Market 2019 Figures
- Median Property Price: $430,100
- Price per Square Foot: $241
- Real Estate Listings: 6,317
- Days on Market: 69
- Price to Rent Ratio: 17
- Traditional Rental Income: $2,080
- Traditional Cap Rate: 2.2%
- Airbnb Rental Income: $2,380
- Airbnb Occupancy Rate: 45.7%
- Airbnb Cap Rate: 2.6%
What Are the Most Important Trends in the Atlanta Real Estate Market Forecast 2020?
The following overview is the result of an review of the forecasts of numerous Atlanta real estate experts as well as our own Atlanta real estate market analysis based on big data and predictive analytics. Below are the predominant Atlanta housing market predictions for 2020:
1. Atlanta Real Estate Prices Will Appreciate
According to real estate data from NeighborhoodScout, the values of homes for sale in Atlanta, GA have appreciated by 67% since the beginning of 2000. This rate exceeds significantly the average natural appreciation in the Georgia real estate market and is about the average for the US. According to various experts, Atlanta real estate appreciation will be 2-3% in 2020, which means that the prices of Atlanta homes for sale will increase more than the average in the US housing market. This trend is expected to carry on beyond 2020, making investing in real estate in Atlanta one of the best long term real estate strategies.
2. Affordability Will Not Pose a Problem
Although Atlanta real estate prices are predicted to appreciate in the coming years, affordability will not become an issue. In 2019 the median value of houses for sale in Atlanta is about double the national median level, but it is comparable to prices in other best places to invest in real estate in the US such as Dallas and Chicago. Instead, the Atlanta, GA real estate market is predicted to enjoy good, healthy natural appreciation.
3. Atlanta Will Be a Buyer’s Market
In 2018 Atlanta was a strong seller’s market. However, the end of 2018 witnessed the beginning of a shift towards a buyer’s market which was more or less completed in 2019. One of the most prominent Atlanta real estate market trends in 2020 is expected to be that property buyers will have the upper hand in transactions. This will be the result of an inventory of over 6 months in addition to good – but not excessive – real estate appreciation. Investors interested in buying one of the 6,317 homes for sale in Atlanta, GA will not need to enter into bidding wars and will be able to close a good deal, especially if they work with a top Atlanta real estate agent.
4. Demand for Atlanta Rental Properties Will Be Strong
Both traditional Atlanta investment properties (long term rentals) and Airbnb Atlanta properties (short term rentals) are expected to be in high demand in 2020. With over 300,000 renters in the city proper alone, vacancy rates for long term Atlanta rentals will be low throughout 2020 and beyond. The moderate price to rent ratio drives the high share of renters in the Atlanta housing market as, generally speaking, in this case renting a property makes more financial sense than buying a home. Moreover, this number is set to rise as the capital of Georgia enjoys one of the fastest population growths nationwide. Combined with the positive outlook for appreciation, this is a money-making real estate investment strategy in Atlanta.
At the same time, while Atlanta already enjoys a large number of visitors, this trend is expected to only go upward in the coming years. Atlanta Airbnb rental properties will benefit from strong demand from both leisure tourists and business travellers. The Airbnb Atlanta investment strategy will enjoy high Airbnb occupancy rate and above average return on investment in terms of both cap rate and cash on cash return.
5. Single Family Homes Will Dominate the Atlanta Housing Market 2020
Single family homes for sale in Atlanta are the most numerous property type in the local housing market in 2019, and this trend will remain the same in 2020. Currently single family homes comprise 56% of all Atlanta real estate listings, followed by condos which make up 29% of the total number of Atlanta homes for sale. This is not the only positive factor for real estate investors interested in this property type. What is even more important is the fact that single family homes offer the highest return on investment in the Atlanta real estate market regardless of the rental strategy. If, on the other hand, you are interested in affordable houses for sale, condos are listed for the lowest price, and they are expected to remain the most affordable property type in 2020.
6. Atlanta Investment Properties Will Generate Above Average Return
Analysis of the Atlanta real estate market done by Mashvisor’s rental property calculator shows that investment properties in this location offer a high return on investment. Traditional rentals bring a rental income of $2,090 on average, which results in a cap rate of 2.2%. The return on investment for Airbnb Atlanta properties is even a bit higher. Short term rentals in Atlanta generate a monthly rental income of $2,380 and a cap rate of 2.6%.
Experienced property investors might consider such rate of return to be low as they traditionally see a good cap rate as 8% and above. However, beginner real estate investors in the Atlanta housing market should take into consideration two factors. First of all, the cap rates above are just city averages, while certain Atlanta neighborhoods and individual investment properties will bring in a much higher return. Moreover, depending on your financing method, you can end up with a really good cash on cash return in this location. Second, these figures exceed the average return which many other top markets for real estate investments will offer in 2020.
Tip: If you want to boost your return on investment right away, consider investing in a foreclosed home or an off market property.
7. Airbnb Atlanta Will Be Legal
Arguably, one of the most significant Atlanta real estate market trends for 2020 might be the fact that Airbnb rentals are expected to remain fully legal there. Unlike other top locations for real estate investing in the US and globally, Atlanta did not join the war on the short term rental industry. Indeed, both owner-occupied and non-owner occupied short term rentals of all property types and in all Atlanta neigborhoods remain fully legal. No major changes in the Atlanta Airbnb laws and regulations are forecast for 2020. Airbnb hosts need to obtain a hotel license as well as a business license and have to pay an 8% hotel/motel tax to the City of Atlanta and a $5/night hotel/motel fee to the State of Georgia, but these taxes do not challenge the profitability of Atlanta real estate investments in 2020.
8. Development and Redevelopment Opportunities Will Be Favorable
The PwC 2020 report highlights the strong opportunities for real estate development and redevelopment activities in Atlanta. This is one of the factors which contributed to the ranking of the capital of Georgia as #8 among US Markets to Watch for Overall Real Estate Prospects. This is a major improvement on behalf of the Atlanta housing market which was already doing well enough in 2019, when it ranked #11. This improvement demonstrates the trust which investors put in the Atlanta real estate market 2020.
What Are the Top Atlanta Neighborhoods for Real Estate Investing in 2020?
After this overview of the major Atlanta real estate market predictions 2020, investors should feel confident to explore opportunities in this top location for buying an investment property. Neighborhood analysis in real estate and property search can be exhausting, so we’ve done the real estate market analysis for you to identify the best Atlanta neighborhoods for investing in rental properties. All calculations have been performed by Mashvisor’s investment property calculator.
Best Neighborhoods in Atlanta for Traditional Rental Properties
1. Monroe Heights
- Median Property Price: $213,500
- Price per Square Foot: $101
- Average Monthly Traditional Rental Income: $1,790
- Average Traditional Cap Rate: 6.4%
2. Carver Hills
- Median Property Price: $141,200
- Price per Square Foot: $115
- Average Monthly Traditional Rental Income: $1,460
- Average Traditional Cap Rate: 5.9%
3. Brentwood
- Median Property Price: $172,500
- Price per Square Foot: $84
- Average Monthly Traditional Rental Income: $1,530
- Average Traditional Cap Rate: 5.5%
Best Neighborhoods in Atlanta for Airbnb Rental Properties
1. Woodfield
- Median Property Price: $735,500
- Price per Square Foot: $253
- Average Monthly Airbnb Rental Income: $9,990
- Average Airbnb Cap Rate: 12.7%
- Average Airbnb Occupancy Rate: 42.3%
2. South Atlanta
- Median Property Price: $188,600
- Price per Square Foot: $141
- Average Monthly Airbnb Rental Income: $2,340
- Average Airbnb Cap Rate: 9.2%
- Average Airbnb Occupancy Rate: 45.2%
3. Princeton Lakes
- Median Property Price: $158,000
- Price per Square Foot: $86
- Average Monthly Airbnb Rental Income: $2,380
- Average Airbnb Cap Rate: 8.7%
- Average Airbnb Occupancy Rate: 51.0%
If you were already considering buying an Atlanta investment property in 2020, now you have even stronger reasons to do so. This overview of the Atlanta real estate market forecast 2020 shows that the capital of Georgia will continue to be one of the best locations for real estate investing due to the affordable property prices, the strong rental demand, and the high return on investment. What is particularly important is that Airbnb Atlanta remains a feasible and profitable option for full-time and out of state investors in 2020 as the vast majority of other major US cities are imposing strict restrictions on short term rentals. So, if you’ve already made up your mind, sign up for Mashvisor, one of the must-have real estate investment tools in 2020. We will turn 3 months of research into 20 minutes, highlighting the best investment properties for your needs and expectations in Atlanta and any other US real estate market.