A year into the pandemic, metro Atlanta’s real-estate and development industry is damaged, uneven, relatively strong, and absolutely killing it

Yeah, strange times.

State of Atlanta's real estate market 2021
Star Metals will include apartments, retail, offices, and a hotel.

Photograph by Ben Rollins

It’s a sunny afternoon on Martin Luther King Jr. Day in Atlanta, and a walk through the Westside is a study in contrasts, a microcosm of a restless city caught between light and dark.

Howell Mill Road teems with construction workers in bright yellow vests finishing major projects—Star Metals (both residences and offices), plus the initial facets of a new mixed-use development, the Interlock—together worth well over half a billion dollars. But just two blocks away, the carcass of longstanding social hub Octane Coffee is neighbored by vacant retail spaces that used to be 5 Seasons Brewing and Hop City. Along the Marietta Street corridor, “Coming Soon” signs for the likes of upscale market Savi Provisions are outnumbered by “For Lease” placards and the papered-over windows of former dining rooms. Deeper into downtown, in the shadow of new luxury apartments for college students and the forthcoming Margaritaville resort, volunteers operate a makeshift soup kitchen on folding tables for men living in a parking lot’s new tent encampment. It’s all a snapshot of Atlanta’s disparate Covid-19 recovery, a juxtaposition of post-lockdown winners and losers in a city known for both civil rights and glaring economic disparity.

After nearly a year of pandemic malaise, 93,200 fewer jobs, and closing in on 800,000 confirmed coronavirus cases statewide, similar contrasts have spread across the metro.

“The Atlanta market is kind of like the old joke about averages: To the man who has his head in a refrigerator and his rear-end in an oven—on average, it’s room temperature,” says Emory University finance professor Roy Black, director of Goizueta Business School’s real-estate program. “The real estate’s generally doing well in areas where the money flows.” Black grades Atlanta’s recovery as a B+, so far.

His colleague Thomas Smith, a Goizueta associate professor in finance, credits the metro’s diverse mix of industries for its relative buoyancy: By December, the U.S. average for 2020 job losses was more than three times higher than Georgia’s. “Atlanta’s home to many multinational companies,” says Smith, “and among those, we’ve seen Delta Air Lines and the Coca-Cola Company hit hard, but Home Depot’s stock price has almost doubled.”

Atlanta’s population has continued to grow. Updater, a tech company that helps people and companies relocate, examined a sample of 1.5 million moves nationwide throughout most of 2020 and found that metro Atlanta ranked sixth for inbound relocations among major cities. Each city in Updater’s top 10 except Denver was in the Sunbelt, and their findings showed Atlanta accrued more expats from greater New York than from anywhere else.

“The quality of life, overall cost of living, and strong economic base continue to be a draw,” says Cynthia Lippert, Atlanta Realtors Association president. Anecdotally, at least, everybody seems to know somebody who’s uprooted to ATL lately. “I have five or six friends that have moved from New England to Atlanta during Covid because it’s a place where they can do their jobs but also walk outside, have a yard, and socialize,” says developer Jim Irwin, New City Properties president.

Karen Hatcher, Sovereign Realty and Management CEO and broker and an intown specialist, has noticed an influx from the other coast: “I’ve seen relocations from California, from buyers and renters. Their reasoning was they had to get out because it’s closed, and Georgia is open,” says Hatcher. “They felt like they couldn’t make any money.”

“It’s puzzling, in a way, because we all hear the news that unemployment has skyrocketed, and there’s such economic despair out there, so how is it possible that the demand remains so high? I’m not sure I can explain it.”

Atlanta was one of the few metros where rents actually have ticked up instead of cratering in 2020, according to Zumper. On the other hand, almost 23 percent of Georgia renters have fallen behind on payments—the fourth-highest rate of any state in the nation, according to a recent LendingTree analysis of Census data. Although President Biden has extended the federal eviction moratorium, housing insecurity looms for many Atlantans in a city with a chronic housing affordability crisis.

Consider the dilemma of a 34-year-old single mother in southwest Atlanta who asked to be called “W.B.” Laid off as a patient-care technician last May and bound to her two-bedroom apartment with a teenage son who struggles with asthma, W.B. was at her wit’s end trying to collect unemployment for several months—“checking, calling, emails, faxing, the whole nine, each day,” she says—when someone told her about an eviction-relief fund provided by nonprofit Star-C. Since the outbreak, that program has partnered with more than 270 landlords and apartment communities, representing 60,000 units, to help keep metro Atlantans in their homes or from falling severely behind in rent. “We’ve fielded thousands of phone calls, and the predominant demographic is service-industry workers or people with positions in the public [sector],” says Star-C founder Marjy Stagmeier. “There are a lot of hardworking, proud Atlantans who’ve swallowed their pride and applied for rental assistance.”

That includes W.B., who calls the support a godsend as she’s applying for jobs. “I’ve had very high stress levels—mentally and physically it takes a toll,” she says. “You pretty much have to be strong and have something to live for, and [I’ve got] my son.”

Prospects are also mixed for Atlanta homeowners. Not nearly as many of them are 90 days or more behind in their mortgage payments as they were during the height of the recession (5.5 percent last fall versus 16 percent in January 2010), according to CoreLogic. However, the number who are more than 30 days overdue is not far off—8 percent in late 2020 versus 9.3 percent in January 2010.

One thing is certain: Record-low interest rates have triggered a frenzy of homebuilding, moving, buying, refinancing, and upgrading. Georgia MLS brokers and agents tallied all-time highs in 2020 for home sales volumes and closings in a single year, representing more than $27 billion and besting 2019’s previous record by more than $3 billion. Median sale prices for Atlanta’s 12 core counties jumped almost 10 percent in a year to $279,990. Hatcher, the intown property specialist, pulled stats for an area covering most of ITP and North Fulton; in that zone, by September, the average sale prices for homes, townhouses, and condos had crested $500,000. And, overall, says Lippert with the Realtors association, the Atlanta housing market “is expected to see one of the country’s steepest rises in home prices” in 2021.

The combination of dwindling supply and ballooning prices has been challenging for first-time homebuyers like 27-year-old David Choi. At one point in 2020, he spotted a $315,000 house in Chamblee and called the agent hours after it had listed. “And she straight-up goes, Well, we’ve already got 11 offers, and if yours isn’t going to be at least $10,000 over asking, don’t even bother,” says Choi, a licensed agent himself. “I’m like, Well, shit!” Choi switched his target to Midway Woods, an older starter-home neighborhood near downtown Decatur, and eventually landed a 1,600-square-foot brick ranch for $303,000.

Although anecdotal reports abound of intown buyers fleeing to the suburbs, reliable data is not yet available to measure whether that’s an actual trend. Lippert says there’s no indication Atlantans fled the city en masse, as with parts of New York City, although “we certainly have seen an increase in people searching for homes OTP,” she says. “Time will tell if these moves are temporary, based on Covid, or if they represent a larger, more permanent shift.”

State of Atlanta's real estate market 2021
The Coe Family: Carmen and husband Aaron; kids Ezra, Joshua, Ella, and Harper (left to right); and Duke (the dog)

Photograph by Ben Rollins

Among those 2020 OTP newbies was Carmen Coe. Since 2014, Coe and her husband had been living what felt like walkable, urban bliss—raising four kids, ages eight to 14, in a century-old Midtown bungalow they’d remodeled six blocks from Piedmont Park. Then came the lockdown. And a feeling of claustrophobia. Strange fatigue. They decided to explore the massive, rising, planned community Trilith south of the city, where the Acton Academy’s unique schooling structure intrigued them. What sealed the deal was a four-bedroom townhome with a 1,700-square-foot layout that is one of the smartest that Coe, a real-estate agent, had ever seen. “I tell people all the time it feels like a bubble here, like the way things should be, and it makes no sense to me why I like it so much,” says Coe. “I was against living in the suburbs, the commute, for so many years, but something like Covid turns everything upside down.”

Like other urban areas, Atlanta suffered in 2020. Planning commissioner Tim Keane calls retail vacancies and the impact on restaurants and hotels a “great concern.” But the city remains so flush with new investment that it could become a national outlier.

“I was pretty bullish on Atlanta going into the pandemic, and certainly coming out of it,” says Leo Wiener, Ackerman and Company’s president of retail. Wiener’s company bought the Lee + White warehouse district along the BeltLine in West End just months before lockdown. Despite so much turbulence in the retail sector, he says demand for his proposed food hall there is so strong, “we could fill it up today.”

In fact, property around the BeltLine has remained so hot that the city recently extended a development moratorium on neighborhoods near Westside Park at Bellwood Quarry to slow gentrification. In the last economic crisis, the Atlanta BeltLine Partnership was criticized for easing its commitment to affordable housing after the recession. This time, zoning regulations that require apartment developers to include affordable units have held firm, though 16 new projects in the last three years have yielded only 60 units for the lowest-income earners. In January, the city also approved $50 million worth of bonds to produce and preserve affordable housing.

The total number of Atlanta residential and commercial building permits dipped slightly in 2020, but as Keane points out, the value of all construction in city limits—$5 billion, from backyard decks to skyscrapers—was still ahead of 2018, if less than the $5.4 billion record set in 2019. “I talk to developers and builders all the time, and the consistent message I hear is that demand is outpacing supply,” says Keane. “It’s puzzling, in a way, because we all hear the news that unemployment has skyrocketed, and there’s such economic despair out there, so how is it possible that the demand remains so high? I’m not sure I can explain it.”

Keane doesn’t believe the pandemic will curtail Atlanta’s metamorphosis into a denser urban environment—or prove that sprawl was virtuous after all. Irwin, the New City developer, believes it will only accelerate trends toward wellness through design, human connections in planned communities, and an appreciation of the outdoors, which metro Atlanta has counted as key attractions for generations.

“It has all the attributes of a sophisticated big city that people are looking for but also a compelling cost of living,” says Irwin. “You never want to frame it in terms of wins and losses, but the great things about Atlanta are winning out.”

$3 billion
more volume in Atlanta home sales in 2020 than in 2019

of Georgia renters have fallen behind on payments

of Atlanta mortgages are at least 30 days overdue

jobs lost in 2020

Atlanta’s ranking for most inbound relocations among major cities

This article appears in our April 2021 issue.