Housing Market

[perimeter285]

Atlanta is one of the few markets in the nation that still has positive housing market numbers. What do you think is keeping our bubble inflated while other markets burst?

[derrickskugler]

What's keeping Atlanta's bubble from bursting is that there is no housing bubble in Atlanta to burst.

As a metro area, we are appreciating far slower than many other areas of the country. Over the past few years while places in FL, CA & the Northeast have seen anywhere from 10-50% housing increases, most of metro Atlanta has been cruising along at about a 3-5% clip.

There have been signs that this appreciation is slowing down (2-3% seems more realistic now than 3-5%), but it's not going to "pop". In order for a bubble to burst, there has to be a bubble to begin with, and in Atlanta, there just isn't that bubble.

I hope that helps make sense!

[ryanmckibben]

derrick is right. to be a little more detailed, bubbles are formed when the underlying economic fundamentals don't support the high valuation of a particular asset. Any asset can find itself in a bubble situation, from tulip bulbs (yes, that actually happened), to IT stocks to real estate.

With regards to real estate, a good gauge to identufy a bubble is to campare wage growth to property appreciation. In places like Boston, NY, DC, LA, Las Vegas, S. Fla, and Phoenix, appreciation has substantially outpaced wage growth. Some Cali. markets and Fla markets have seen property values rise 200%to 300% over the last 3-4 years. Either employers need to start being much more generous with regards to salaries or, more likely, property valuations will start to fall back to what the market fundamentals actually support.

[Andrea]

What Ryan and Derrick said. I don't think we have a bubble here.

There may be some particular spots where speculation has driven housing prices up artificially, but overall appreciation has been relatively modest and in keeping with wage growth.

[Martinman]

What Derrick, Ryan, and Andrea said

This recent ABC article gives a bit of info on the Atlanta Housing market including a rather staggering statistic

ARC: Metro Atlanta housing market still hot

The 28-county Atlanta MSA led the nation with 32,737 single- and multi-family building permits issued in the first five months of the year, outpacing metro areas including Houston, New York, Las Vegas and Miami, the ARC said. If the trend continues through the end of 2006,the Atlanta MSA will mark 13 consecutive years of leading the nation in issuing residential building permits.

[Andrea]

By contrast, the situation in Florida:

http://www.globaleconomicanalysis.blogspot...ing-market.html

[Newnan]

wow, great news. Atlanta has been growing so fast for so long that I think a lot of people are waiting for the whole metro to go bust, but I don't see it happening any time soon.

[verge]

What's keeping Atlanta's bubble from bursting is that there is no housing bubble in Atlanta to burst.

As a metro area, we are appreciating far slower than many other areas of the country. Over the past few years while places in FL, CA & the Northeast have seen anywhere from 10-50% housing increases, most of metro Atlanta has been cruising along at about a 3-5% clip.

There have been signs that this appreciation is slowing down (2-3% seems more realistic now than 3-5%), but it's not going to "pop". In order for a bubble to burst, there has to be a bubble to begin with, and in Atlanta, there just isn't that bubble.

I hope that helps make sense!

Atlanta, overall has been slower and steady in the overall housing market... there are some intown areas however where growth has been in the 10%-15% per year range for a while-- Inman Park for example (at least the non-condo sales)... though, it too is slowing now...

[rocky top buzz]

One area where Atlanta isn't growing as fast is Peachtree City. Their entire economy id so heavily dependent on Delta, and with the wage cuts from the airline, prices have really leveled off and houses are staying on the market longer. I won't say that prices are declining (I have no stats) but I know my in-laws sold their house for less this summer than they would have last summer (according to their agent).