Editor's note: This article Paula HenaoGlobal Real Estate Advisor Atlanta Fine Homes Sotheby's International Realty; As part of our annual partnership with Global Atlanta.
The impact of economic development on the real estate market georgia It cannot be underestimated. As new companies continue to invest in land, offices, and businesses in different parts of the state, the need for residential and commercial real estate is growing at the same time.
Foreign direct investment and companies with international connections are an important part of this development.
a town like alpharetta, John's Creek, Mr. Swanee and surrounding areas are booming with investment in the healthcare and fintech industries, spurring residential and commercial real estate development.
Similarly, residential and commercial real estate is expected to grow in other counties near new construction sites. Rivian Automotive Co., Ltd. An electric vehicle factory located along Interstate 20 east of Atlanta.in gwinnett county with lowen Innovation district located between athens and lawrenceville And in many other parts of the state, companies are choosing where to establish their presence.
These investments provide real estate opportunities for new entrants to the state as well as current homeowners looking to build wealth through real estate investing.
Is the backlog scheduled to hit the market in 2024?
When interest rates rose in 2023, the housing market slowed to its pre-pandemic pace. This pattern is more like a “traditional” market, with the year unfolding with a slow start, gradually gaining momentum into the spring, and peaking in May. June and July saw a temporary slowdown due to the typical lull between graduation season and summer vacation. Activity increased at the end of the summer in conjunction with the return to school, but gradually decreased as the holiday season approached.
The year ended with an increase in the number of home listings for sale, but a 20% drop in closings, longer days on the market to go under contract, and a slight decline in average home prices. . Buyers have heard negative outlooks on the national news and are waiting for interest rates to drop before making purchases.
But the reality is that the Atlanta market is more dynamic than the national market. Due to the long-term back-up in new home construction that began after the 2008 recession, many areas are seeing multiple offer situations due to limited housing inventory. Inventories are also down because at least three-quarters of people who bought or refinanced during the pandemic did so when interest rates were at historic lows. Most homeowners in Georgia are reluctant to buy new homes with interest rates of 7-8% because the interest rates are fixed below his 5%.
according to National Association of Realtors (NAR) chief economist Lawrence Yun, this situation created huge amounts of illiquid housing equity in addition to stalled sellers. Therefore, we expect more inventory to become available in 2024 as some of these sellers are forced to relocate due to natural life events such as job transfers, new babies, marriages, divorces, and deaths.
On December 14, 2023, the 30-year fixed mortgage rate fell below 7% for the first time since August, reaching 6.95%.of federal reserve The government has indicated that it will keep the federal funds rate unchanged for the time being and cut rates three times in 2024. This is welcome news for potential buyers and sellers, as mortgage rates will fall. NAR projects that mortgage rates will average 6.3% in 2024.
Benefits of a slow market
Potential homebuyers looking to purchase a home in 2024 should consider their options now. In the current high interest rate environment, smart buyers can take advantage of slowed markets where they can factor in concessions and price reductions into less competitive deals.
Start your search now to secure the best possible terms. With interest rates expected to fall, demand will surge, creating a scenario reminiscent of the competitive market seen in 2021 and the first half of 2022. Beat the rush and potential price hikes by acting early and securing your dream home or investment. You can get your hands on the property before anyone else makes a bid.
Don't miss this chance. You can always lower your interest rate by refinancing, but you won't be able to recover any increase in home value or the cash you paid in excess of the list price. Inevitably, these factors influence home prices and sales growth.
Healthcare and fintech impact north Atlanta housing market
Georgia is considered a top business state, and the state is active in attracting new companies to its metropolitan areas. This investment will lead to a surge in capital spending and job growth, particularly in the automotive, fintech, healthcare, life sciences, and film industries.
Health companies choose to locate in Johns Creek and Alpharetta because of the medical innovations there. emory hospitalFor example, Johns Creek has a strong reputation and attracts talent, suppliers, and services from around the world.
companies such as boston scientifican international medical device manufacturer with facilities in Alpharetta. archon The world's largest eye care equipment company with a contact lens manufacturing plant in Johns Creek.alpharetta base Princeton Healthcare Internationalwho received Georgia Department of Economic Development GLOBE – Georgians Harnessing Opportunities by Exporting – Awarded last year.Global headquarters in Alpharetta halyard healthpart of Owens & Miner Global Products DivisionThe company, which makes PPE and surgical supplies, represents the city's efforts to integrate local medical practices and health services.
Fintech is popular in North Atlanta as well. Home to 245 financial technology companies, 10 of which have revenues of approximately $49 billion, Atlanta is one of the world's leading fintech capitals. Most of these businesses are located in the “400 Corridor,” an area between GA400 and Interstate 85 near Alpharetta, Johns Creek, and Suwanee. They are based here, in part, because of the skilled pool of professionals who have graduated from universities and other universities. Georgia Tech . And they want a home in the area.
North Atlanta's real estate market reflects the two fastest growing industries there: healthcare and fintech. These markets are the most competitive, primarily because of the high-paying jobs. People working in these fields want their families to have the best security and attend the best schools, and housing prices and demand show that.
Automotive investments impact Southeast Atlanta housing market
Rivian's headquarters Californiasuppliers to nearby pending manufacturing facilities. social circle Likely to include international companies, as Georgia has experienced hyundai carNear the “Metaplant” of savannahor together kia motors investment in west point.
Rivian has already opened offices covingtonIt is located near the manufacturing site and exhibition space. Ponce City Market. $5 billion electric car factory It is Georgia's largest economic development project and is expected to employ more than 7,500 people and indirectly create an additional 7,978 jobs. The 15,478 jobs supported by this plant are projected to generate more than $1 billion in labor income.
These employees and their families require housing in surrounding counties. jasper, morgan , newtonandwalton county , sales of existing homes as well as new homes are being promoted. The impact on the housing market in this region will be significant.
Demographic changes and talent mobility
The trend towards remote work is reshaping migration patterns and showing significant impact on the real estate market. Wealthy and young people are increasingly motivated to move, leading to increased demand for housing in suburbs and small cities.
Changes in the market are expected due to the need for closer-to-home retail and reduced demand for traditional office space. But despite these changes, the demand for talent continues, and employers' need for the right person for the right job at the right time remains the same. As upwardly mobile employees want career advancement opportunities, global searches are occurring on both sides of the aisle as employers seek to attract the best talent available.
This requires outplacement services that help employees find the right community and focus on their careers. Making changes in your life to advance your career is no small thing. Atlanta Fine Homes Sotheby's International Realty understands this and takes pride in elevating transition to an art form. Through global connectivity and local expertise, mobility management becomes more than just logistics. It's an opportunity to build a better life, utilize your talents, and strengthen your bonds.
Housing outlook in 2024
As we step into 2024 armed with knowledge of market trends, demographic shifts, and key industry impacts, Atlanta's real estate landscape promises a dynamic and bright future. Whether you are a buyer, seller, or investor, understanding these complexities will enable you to make informed decisions in this evolving real estate market. The resiliency and adaptability of the Atlanta market bodes for opportunity and growth in the years to come.
All of this means the idea that real estate is one of the greatest opportunities available in Georgia. Atlanta Fine Homes Sotheby's International Realty helps new businesses and their employees find the right property to meet their needs.
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