Georgia Real Estate Trends
Georgia, also known as the Empire State of the South, is one of the ten fastest growing states in the U.S. in terms of population. With a total gross state product of almost $400 billion in 2007, Georgia is also the tenth largest economy in the Union and in the top thirty largest economies in the world!
So where does all this place Georgia when it comes to real estate in 2009? Well, it hasn't sheltered the state of Georgia from the economic impact that the rest of the U.S. has experienced but it has lessened the blow in some areas.
For example, the S&P/Case-Shiller U.S. National Home Price Index for November 2008 showed that Atlanta housing prices have declined just 9.5% compared to the same quarter in 2007, while the national metropolitan average was down almost 17% and Phoenix was suffering from a 32% decline.
Georgia also has a lower cost of living and lower average home price than the national averages.
However, Georgia is still struggling. AJC wrote on February 17 that Atlanta was the third emptiest city in the country in terms of vacant rentals and single-family homes following only Detroit and Las Vegas.
RealtyTrac reports that Georgia's average home value has fallen from a high in April 2007 of almost $185,000 to $162,000 in December 2008. They also note that Georgia was number eight in the nation in January 2009 in terms of foreclosure activity.
Interestingly, the foreclosure activity is rather focused. RealtyTrac shows that 67% of foreclosed homes in Georgia are in the $100,000 to $200,000 value range with three-bedroom dwellings strongly outpacing foreclosed homes of other sizes.
It is also interesting to note that foreclosure activity is heaviest in the northern part of the state. Whether this means that southern Georgia's economy is more stable or simply that the people were more prudent with their home purchases during the boom is a question that remains unanswered.
On the commercial side, Georgia is also experiencing its share of the gloom.
Office and Retail real estate transactions were down substantially in early 2008, at 58% and 71% respectively. The AJC now predicts that commerical losses may be the next wave to hit Georgia banks and noted in a January 16 article that Synovus and SunTrust have received recent downgrades or reduced earnings estimates due in part to their commercial loan portfolios.
The Atlanta Journal-Constitution, in a November 12, 2008 article, quotes an Urban Land Institute report that predicts more trouble coming for the Atlanta area. Buckhead, just north of downtown Atlanta, typically absorbs 500,000 square feet of office space each year but 2,000,000 square feet are currently under construction.
And the closing of stores by chains such as Circuit City, Goody's and Kaybee Toys is impacting not only retail space but employment figures in towns across Georgia. That could lead to a circular impact on housing.
Still trying to understand what this means for Georgia real estate in 2009? So are the professionals!
One thing remains certain: The longer the recession lingers, the worse the impact will be on housing and commercial real estate in Georgia. Bargain hunters should be cautious and thorough in their research. However, those who take their time and invest wisely (and within their means) can reap generous benefits as the economy recovers.
When that will be only time will tell.
-GeorgiaCityRealEstate.com