Georgia Housing Prices Continue to Retreat, but No Relief for Renters Yet

Atlanta, GA.Photo byBrad HuchtemanonUnsplash

The peak of Georgia's red-hot housing market appears to now be a distant memory. Prices statewide have now fallen for the seventh straight month, according to real estate data provided by Redfin, with the median home statewide now selling for $336,000 compared to $373,000 back at the market's peak in June of 2022. While that information isn't exactly welcome news for those who bought at the top of the market or for individuals who make a living in the real estate business, it does represent the first positive signs seen in several years for prospective buyers.

Unfortunately for renters, however, those price concessions have not made it down to the rental market. As the Federal Reserve continues to hike interest rates in an effort to combat inflation, the average mortgage payment is remaining the same - or even increasing - even as housing prices fall. As most investor-owned apartments use their own costs to price rental units, these developments have kept rental prices high even as property values decline.

According to rent.com, which tracks rental market data across the nation, Atlanta area apartments are between five and nine percent more expensive than they were a year ago. What's worse for renters on a budget is the breakdown of current market offerings: roughly half of the apartments currently offering leases in the area are more than $2,000 monthly, while only 15% are between $1,000 and $1,500.

For those who are beneath the state's median household income of $65,000 and depend on affordable or subsidized housing, the situation is far worse. Public policy and advocacy groups who focus on the housing market estimate there is a current shortfall of 340,000 affordable housing units statewide, with the majority of that shortfall occurring in the areas surrounding Atlanta and Savannah, though other cities are also seeing shortages.

These figures are despite actions taken by the state government in 2022 to attempt to bridge some of the gaps in housing availability using resources allocated to the state during the pandemic. Governor Kemp, for example, allocated $92 million in 2022 to various affordable housing projects, including incentives to developers who carved out a portion of their complexes for affordable housing. From that press release:

Projects receiving awards include construction and renovation of affordable housing for elderly residents as well as at-risk and low-income individuals; rental and housing units for special needs or disabled residents; and assistance for veterans experiencing homelessness. Housing insecurity issues were exacerbated by the COVID-19 pandemic, leading to more individuals and families facing uncertainty about their living situation.

Affordable housing is a major concern for the state, but not the only one impacting the housing market. Those with salaries above the level that qualifies for subsidized housing programs are facing difficulties of their own, as market rents well into the 2,000s consume a larger and larger portion of households' incomes.

Savannah, GA.Photo byRon DylewskionUnsplash

Most financial experts recommend no more than 30-33% of pre-tax income be allocated for housing costs in any given household. Using that metric and rent.com's data, the median household in Atlanta would need to be making $84,000 to afford a one-bedroom apartment or $97,520 to afford a two-bedroom apartment comfortably.

The actual median income for city households of $69,000 is well beneath both of those figures, indicating a large portion of the city is currently cost-burdened. Combined with continual high inflation, many Georgia households are feeling financial pressure. Unfortunately, the falling home prices don't seem to be providing any relief to the rental market. With rates widely expected to continue rising, it's unlikely renters will see a significant change in the near future barring an unexpected, major event.

Author's note: Those interested in reading the full rental report or housing data reports can click on the links above to find the original information used in this article.