With more than 6,000 units under construction and another 7,000 units in the pipeline, it’s no secret that Atlanta is the middle of a multi-family boom. The recent economic downturn has caused people to rent as they have been unable to get approved for home loans. Developers have taken advantage of this and begun introducing new product on the multi-family market. But with talks of a boom, there is always a rumor of a bust. Is that where Atlanta is headed?
According to multi-family experts, Atlanta is far from busting – in fact, we may be setting ourselves up to avoid that this time around. Talk of a bust is premature based simply on the fact that Atlanta is still behind other major cities in terms of recovery; while those markets have seen rent growths begin to slow Atlanta is still seeing substantial increases, which is attractive to investors. Atlanta is still about 35% off peak levels in terms of job recovery, and as this number diminishes it will place drive rents and occupancy levels up.
Another argument again a multi-family bust is a matter of supply and demand. Atlanta has been so starved for new multi-family units in recent years that even though the city is dramatically increasing the supply, it’s still not at the levels of all of the pent-up demand. The location of the supply is another factor that many fail to consider. The multi-family units that are being built in Midtown and Buckhead are much different than those building built in the suburbs, as they aim to attract different types of tenants. The diversity of the supply being introduced to the Atlanta market is yet another factor that protects Atlanta against a bust.Share