The Atlanta Journal-Constitution
Housing prices reach unaffordable levels
Survey finds that the prices of homes in metro Atlanta’s five core counties have risen 21 percent in the past three years.
Robert Kee knew his intown Atlanta neighborhood had inordinately changed when he saw a jogger dragging some weights on wheels.
“You could see the turn right there because no one would try that crap five years ago,” said the computer programmer who lives in Reynoldstown, a gentrifying neighborhood 3 miles east of downtown.
Kee, who is white, had rented in the once predominately black area before buying a small bungalow for $88,000 in 2011. His home is now worth $250,000-plus, which is about the median price of a metro Atlanta home— $254,900, according to a recent Re/Max Georgia survey.
The survey found that the price of homes in metro Atlanta’s five core counties have risen 21 percent in the past three years. During that time, salaries are up 9 percent, widening the gap between salaries and home prices.
AJC business reporter Mike Kanell wrote, “That means well over half the homes sold are now far out of reach for households with the region’s median income of about $63,000.”
He was basing that on the rule of thumb that homebuyers should spend two and a half times one’s salary on a home, meaning the average metro buyer should aim at a $157,500 abode. Good luck finding that, at least north of I-20.
What got me knocking on Robert Kee’s door was my continuing puzzlement concerning the ubiquitous signs popping up at construction sites all over metro Atlanta. You know the ones. They carry the cheer-
ful or prestigious-sounding name of the development and say, “From the $400s.” Or the $500s. And up.
When passing these (they often accompany yawn-provoking townhomes), I ask myself, “Self, who are all these people? And why do they want to be underwhelmed after spending a half-million bucks?”
Kee sits within sight of two construction sites: One is an 11-townhouse development priced “From the 500s.” The other is called R.Town Stacks, a name that kind of sums it up — four residential units stacked onto two city lots where a couple of small houses once stood. The 2,700-squarefoot units have rooftop terraces and will be a short jaunt to the Beltline for joggers dragging weight carts. Those are “From the $700s.”
Kee thinks like I do when seeing the “From the $500s” signs.
“It’s a constant source of conversation around here: Who are these people? And where are they coming from?” said Kee. “What’s coming in (near his bungalow) is a pretty good sign of who is benefiting and who is being pushed out.”
Someone buying a “Stack” should make almost $300,000 a year if the rule of thumb calculation is taken into account.
A little personal history here. Back in 1991, my wife and I moved into an old Candler Park bungalow for $117,000. My wife was attending school and
working a bit, and I made $40,000, so the house was within reach. Using the CPI inflation calculator, that $40,000 would be $73,000 today and the $117,000 home would be $214,000.
Today, you’d be lucky to find a similar bungalow there for $450,000, meaning you’d need to be making “From the $180s!” to walk in the door.
Later, after our third kid, we beat it for a neighborhood with bigger homes in DeKalb County near Toco Hills. The homes were then around $250,000, but having made a $100,000 appreciation during six years in Candler Park, we could afford the move. Still, even though we put a bunch of money down and earn a lot more than we used to, we still — 21 years later — sometimes must do a financial shuffle before writing a mortgage check.
Recently, a website called Niche ranked the
“North Druid Hills” neighborhood the nation’s 10th-best community for millennials. There really is no such neighborhood, but there’s a road with that name. I live near it. And it’s really kind of swell that the millennials find us cool.
The site used factors like the percentage of residents between ages 25 and 34, access to bars, restaurants and coffee shops, college degrees, cost of living, crime, etc.
To meet this onslaught, the Toco Hill shopping center is up-scaling and has added two salad cafés near Maggies, a joint where you can still smoke and drink a beer while shooting pool. For now.
The Niche article indicates why so many “From the $400s and 600s!” signs are popping up along North Druid Hills Road. (The “From the $600s” homes were actually listed at $699,000 and are boxy 3,000-squarefoot fortresses where the garage doors are the most prominent architectural feature.)
Dan Immergluck, a housing expert and professor of urban studies at Georgia State University, said new developments are driving up the median price of homes. Fulton County’s median is $380,000.
Townhouses, he said — nice, expensive ones — are “where the real money is.” It makes sense for developers. Bulldoze a few older houses and replace them with two dozen or so townhomes.
There’s a core of people who like the idea. It squeezes more people together. Density, they call it. Traffic gets so bad you’ll have to take transit. Or so the thinking goes.
“We’re not seeing new construction of homes under $200,000; it’s not profitable,” Immergluck said. “We’re adding jobs at the high end and the low end.”
It’s well worth building luxurious homes for the former. The latter are renters. And with that, “We’re seeing separation of place by price,” he said.
Stats from the Atlanta Regional Commission show the number of jobs in metro Atlanta grew 2.5 percent last year, twice the national average. Sectors such as professional/ business jobs are up 6.2 percent; information technology up 4.2 percent; finance up 3 percent. All about twice the national average.
And if we win the Amazon headquarters sweepstakes, be ready for new signs popping up: “If You Have to Ask, You Can’t Afford It.”