Is there a housing bubble in ATL? (Atlanta, Lilburn: mortgages, townhomes)

[fourthwarden]

I guess i'm not so convinced that there's a major issue, yet. I don't quite see a bubble bursting, so much as simply deflating a bit. We had one complex decide to not build out, and we'll see a few more as the market stabilizes.

What really needs to happen, is a step off of these 'luxury' apartments. I'm worried, as the supply begins to meet the demand, and there're more options in the market which bring down prices, we'll see developers simply not build. Not from a lack of demand for living, but from a lack of demand for high-priced, high-margin 'luxury apartments'.

[zedsmith]

Originally Posted by st3mpy

Entitled? You must have missed the part where I said I wanted to purchase the condo. That was also the neighborhood I lived in, because it WAS cheap. Silly me, thinking I should be able to afford a condo in the area I helped turn around.

Bless your heart for all that hard work you did drinking on Edgewood.

[Davos Seaworth]

Economics are supply-demand. The huge bubble burst for multiple reasons. One was the lending practices already discussed, which caused a huge influx of false demand. But the other side was huge supply. Builders flooded the market. That just isn't happening. People can point to one or two spots in South Forsyth or places where a lot of new construction is happening, but in total for the MSA, the total number of new housing permits is ridiculously low compared to the peak. In addition, the trade capacity does not exist to significantly impact the construction permits at this time. Supply is going to remain very very low for years. As a result, pricing will not burst unless a huge spike in interest rates happens.

[Tarzanman]

Originally Posted by Davos Seaworth

Economics are supply-demand. The huge bubble burst for multiple reasons. One was the lending practices already discussed, which caused a huge influx of false demand. But the other side was huge supply. Builders flooded the market. That just isn't happening. People can point to one or two spots in South Forsyth or places where a lot of new construction is happening, but in total for the MSA, the total number of new housing permits is ridiculously low compared to the peak. In addition, the trade capacity does not exist to significantly impact the construction permits at this time. Supply is going to remain very very low for years. As a result, pricing will not burst unless a huge spike in interest rates happens.

Supply and demand are two of many factors that affect the housing market. It is far from a perfect, free, or perfectly elastic market.

[JoeP]

When 100k people are moving to the Atlanta MSA a year

I just want to clarify something - population change is not = migration. Migration is part of it.
The reason why I say this is because the Atlanta metro gained 95,000 people last year.

73,000 of them were births. I'm not noting this to be an ass, but because natural change is often a forgetton part of population change and births are a reason why people move too...

[AnsleyPark]

By many metrics, housing costs are below their 2007 level. So, it would not appear that housing is in a "bubble."

[Forhall]

Housing costs are rising in Atlanta because like other southern cities, it has become a desirable place to live by young professionals as the US "white flight" of middle and upper middle class whites to the suburbs reverses itself. The younger generations have become more accepting of diversity and more into the european lifestyle where cars are less relied upon and people can walk to the restaraunts, shops, etc that they wish to visit. This has led to them flooding cities after college, but the problem is the previously "desirable" cities of Boston, NYC, etc are too expensive. So, they've started colonizing southern cities like Atlanta, Charlotte, Austin, Raleigh-Durham. This has lead businesses to follow to scoop up this fresh talent. This leads to even more people moving there to work at the businesses. This leads to rising home costs, which leads to rising wages, which leads to better choices of restaraunts and new shops, which leads to more desirability, which leads to even more people migrating from other states or far out suburbs, which leads to yet higher home costs.

This flow would have to be disrupted for the bubble to crash. This is a more organic, natural growth, and there is no guarantee that it will ever "pop". Just look at NYC after crime was finally cleaned up throughout the city. They followed the same pattern and now you're lucky to find a 1 bedroom to rent in Manhattan for less than $3,000.

[whodean]

Hot money and artificially low interest rates, both provided by the Fed are keeping the real estate market in this country in a bubble.

yes, perhaps values are lower than they were in 2007, that does not mean values should not be much lower now than they are.

[arjay57]

Originally Posted by AnsleyPark

By many metrics, housing costs are below their 2007 level. So, it would not appear that housing is in a "bubble."

I agree. There is no "bubble."

Folks should also recall that almost nothing was built between 2008 and 2012, so there was a lot of catching up to do just to get back to normal.

[fourthwarden]

Originally Posted by arjay57

I agree. There is no "bubble."

Folks should also recall that almost nothing was built between 2008 and 2012, so there was a lot of catching up to do just to get back to normal.

To be fair, there was also a lot of housing stock left over pre 2008, and a saturated market as people tried to bail on their underwater homes or the banks foreclosed.