It’s becoming increasingly difficult to own one in metro Atlanta. The Atlanta Regional Commission reviewed census numbers and said the homeownership rate in metro Atlanta decreased by 3% from 2000 to 2019.
So all these apartment buildings pop up like mushrooms as people flow into the area.
As a father, I worry about how young people can do that. But somehow they do. The National Association of Realtors said in a report last year that first-time homebuyers accounted for 32% of all homebuyers. This is lower than the historical ratio of 38%.
People tend to apply their own experiences to absorb problems. This is mine:
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
In 1991, my wife and I had a baby and wanted to buy one. We set our sights on Candler Park and purchased an older two-bedroom Craftsman bungalow for $117,500. It looked like a lot of money. At the time, the median home price in the Atlanta metropolitan area was $95,000. That’s right, today he is less than a quarter.
Due to inflation, that bungalow would now cost $267,000, but homes in the neighborhood cost more than $600,000. My old house has been renovated and is now worth $1.4 million. The median price of his $95,000 home in Atlanta in 1991 should be $215,950. But it’s $405,000.
I get it, people make more money. But not 4x. At least not the majority of people. The Social Security Administration says wages in the United States have nearly tripled since 1991. However, prices have increased significantly since he has increased by 230%.
My children’s friend Andrew Jacon, 27, just bought his first home in southeast Atlanta for $442,000, below the asking price of $460,000. He first researched Kirkwood and Reynoldstown, popular neighborhoods in Atlanta, but realized they were outside his range.
“The policy came at the perfect time when people were waiting for (interest rates) to come down,” Jacon said.
How did he pull it off? First, he’s a Georgia Tech graduate and has a good job. He was frugal and spent money.
“Also, thanks to my mom and the HOPE Scholarship, I was lucky enough to not have to take on any student loans,” Jacon said. “But I’m the only person I know who bought solo. Most everyone else got help with the down payment from their parents or with a spouse.”
Credit: Photo provided
Credit: Photo provided
Eugene James, a real estate appraiser, analyst, and broker, has been in the business for more than 30 years and is familiar with the “modern-day mom-and-pop bank” financing strategy.
“For the past few years, I’ve been struggling with pricing for first-time homebuyers,” he told me.
It used to be common to spend about 30% or less of a family’s income to buy a home. Now more people have to extend it.
“They now have to work together, and many of them, especially first-time buyers, are unmarried,” James said. “And there’s an old adage that says drive until you qualify.”
In other words, the further away you go, the cheaper the house will be. But that’s not necessarily true. Once affluent, Forsyth County had the highest median home price in the Multiple Listing Service’s study, at $653,000. Cobb is making $418,000, Gwinnett is making $425,000 and Henry is making $342,000.
Minorities are in an even more difficult situation, he added. According to the ARC report mentioned above, the homeownership rate for white households in metro Atlanta was 73.7%. Among black households, the figure is 47.5%.
“It was never easy to get into that house, but now it’s even harder,” said John Grimes, a former Cobb firefighter who now sells homes. They have to make sacrifices. Must be realistic.
“They’re overwhelmed by what they’re seeing (within their price range). They need to adjust their expectations. Get out more and have three bedrooms instead of four.”
Another factor is that hedge funds are buying up vast numbers of homes for rental in metro Atlanta, which the AJC investigated last year.
“They buy houses for cash. The average home buyer doesn’t have a chance,” Grimes said. “I think they are intentionally trying to exclude generations of homeowners.”
Jimmy Barron, a former radio host on 99X, is now a real estate agent. He found that many “first-time homebuyers have unrealistic expectations, unrealistically high expectations.” They believe that the big, beautiful house that their parents lived in and grew up in for 20 years is what they want now. ”
“We are a society where people want the best in everything, even if it’s out of their reach,” he said, before adding, “How many times do people buy a home they can’t afford?” “It’s going to be frustrating to see that,” he added.
He said couples would come to him and say, “I have a budget of $550,000 and I want a renovated home in Sandy Springs.” It’s his job to provide a reality check and say, “That’s not happening.”
“I tell them you can find the house you want. I can’t promise you the location you want,” Baron said. “You really have to understand the art of compromise.”
I know people don’t like compromise. But today, there are few options.
