Foreign Investment in Key Sectors Set to Boost Metro Atlanta Real Estate Market in 2024 – Global Atlanta

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Editor’s note: This article was contributed by Paula Henao, global real estate advisor at Atlanta Fine Homes Sotheby’s International Realty, as part of her annual partnership with Global Atlanta.  

The impact of economic development on the real estate market in Georgia cannot be underestimated. As new businesses continue to invest in land, offices and operations in various locations around the state, the need for residential and commercial property rises in tandem.  

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Foreign direct investment and companies with international ties represent a significant portion of this development.

Towns like Alpharetta, Johns Creek, Suwanee, and surrounding areas are booming with investment in the health care and fintech industries, prompting housing and commercial property development.

Similarly, residential and commercial real estate is expected to grow in other counties near the site of the new Rivian Automotive Inc. electric vehicle plant in the Interstate 20 corridor east of Atlanta; in Gwinnett County with the Rowen innovation district located between Athens and Lawrenceville and in many other areas of the state where companies are choosing sites to establish their footprint.  

These investments offer real estate opportunities not only for newcomers to the state but also to current homeowners aiming to build wealth through their property investments.  

Pent-up inventory set to hit the market in 2024?

As interest rates rose in 2023, the housing market slowed to a pre-pandemic pace. This pattern looked more like the “traditional” market, with the year unfolding with a slow start, gradually gaining momentum leading up to spring and reaching its peak in May. The months of June and July witnessed a temporary slowdown, attributed to the typical lull during graduation season and summer break. Activity picked up post-summer, aligning with the return to school, only to taper off as the holiday season approached.  

The year closed with increased home listings for sale but 20 percent fewer closed sales and longer days on market for contracts, as well as a slight reduction in the average price of homes. Buyers have been listening to the negative outlook from national news and waiting for interest rates to go down before purchasing.   

But the reality is the Atlanta market is more dynamic than the national market. We are seeing multiple-offer situations in many neighborhoods due to limited housing inventory caused by a long-term backup in new home construction that originated after the 2008 downturn. Inventory is also low because at least three-fourths of the population who purchased or refinanced during the pandemic did so when rates were at a historic low. Most Georgia homeowners have interest rates locked below 5 percent, so they have been reluctant to purchase a new home at 7 or 8 percent rates.   

The reality is the Atlanta market is more dynamic than the national market.

Paula henao

According to National Association of Realtors (NAR) Chief Economist Lawrence Yun, this situation has generated massive illiquid housing wealth in addition to pent-up sellers; therefore, it is anticipated that more inventory will become available in 2024 as some of these sellers are forced to move due to natural life events such as job relocation, newborn babies, marriages, divorces, deaths and more.  

On Dec. 14, 2023, and for the first time since August, interest rates for a 30-year fixed mortgage dropped below 7 percent, hitting 6.95 percent. The Federal Reserve indicated it will hold the Fed Funds Rate steady for now and cut rates three times in 2024. This is all welcome news for potential buyers and sellers, as mortgage rates will decrease. The NAR forecasts that mortgage interest rates will average 6.3 percent in 2024. 

Advantages of a Slower Market  

Potential homebuyers looking to make a home purchase in 2024 should weigh their options, starting now. With the current high-interest rate environment, savvy buyers can take advantage of a slower market, where concessions and price reductions can be woven into the deal with less competition.  

Start your search now to secure the best possible terms. As interest rates are anticipated to decrease, demand will skyrocket, leading to a scenario reminiscent of the competitive market seen in 2021 and the first half of 2022. Beat the rush and potential price hikes by making your move early and securing your dream home or investment property before others join the bidding frenzy.  

Don’t miss out on this window of opportunity. The interest rate can always be lowered by refinancing, while higher home prices and cash paid above the listing price are no longer recovered. Inevitably, these factors will influence an increase in housing prices and sales.   

Healthcare and Fintech Influence Residential Market in North Atlanta  

Georgia is considered the number one state for business, and the state has been proactive in bringing new companies to the metro area. With this investment, we see a surge in capital spending and an increase in jobs, especially in the automotive, fintech, health care, life sciences and film industries.  

Health-related companies have chosen to locate in Johns Creek and Alpharetta because of the healthcare innovation nurtured there. Emory Hospital at Johns Creek, for example, enjoys a good reputation and attracts personnel, suppliers and services from around the world.   

Companies such as Boston Scientific, an international medical device manufacturer with facilities in Alpharetta; Alcon, the largest eye care devices company in the world with a contact lens production plant in Johns Creek;  Alpharetta-based Princeton Healthcare International that received a Georgia Department of Economic Development GLOBE – Georgians Leveraging Opportunities By Exporting – Award last year; and the Alpharetta global headquarters of Halyard Health, part of the Owens & Minor Global Products Division that makes PPE and surgical supplies, represent the cities’ efforts to consolidate medical practices and health services in the area.   

Fintech is just as popular in North Atlanta. With 245 financial technology firms, 10 of which generate some $49 billion in revenue, Atlanta is one of the top fintech capitals of the world. Most of these companies are in the “400 corridor,” the area between Highway GA400 and Interstate I-85 near Alpharetta, Johns Creek and Suwanee. They locate here partly for the skilled talent pool of professionals coming out of universities like the Georgia Institute of Technology. And they want homes in the area.  

The real estate market in North Atlanta is a reflection of the top growing industries there, healthcare and fintech. These markets are the most competitive mainly because of the high-paying jobs. People working in these sectors want their families to have the best security and attend the best schools – and housing prices and demand demonstrate this.

Automotive Investment to Impact Southeast Atlanta Housing Market  

Though Rivian is based in California, suppliers to its pending manufacturing facility near Social Circle are likely to include international companies, as Georgia has seen with Hyundai Motor’s “metaplant” near Savannah or with Kia Motors’ investments in West Point.  

Rivian has already opened an office in Covington near its manufacturing production site, as well as a show space at Ponce City Market. At $5 billion, the electric vehicle factory is thelargest economic development project in Georgia and is expected to employ more than 7,500 people and indirectly create an additional 7,978 jobs. The resulting 15,478 jobs supported by the plant are projected to generate more than $1 billion in labor income.  

Those employees and their families will need housing in the surrounding counties of Jasper, Morgan, Newton and Walton Counties, spurring new construction as well as sales of existing homes. The impact on the housing market in the area will be significant.  

Changing Demographics and Talent Mobility 

The remote work trend has reshaped migration patterns, indicating a major impact on the real estate market. Affluent and younger individuals are more willing to relocate, sparking increased demand for homes in suburbs and smaller cities.  

The need for retail closer to homes and a decline in the demand for traditional office spaces are anticipated shifts in the market. However, even with these shifts, the demand for talent continues, and employers’ need for the right person in the right job at the right time endures. Upwardly mobile employees desire the opportunity to advance their careers, while employers look to attract the best talent available, creating a global search on both sides of the aisle.  

To that end, relocation services are in demand to help employees find the right communities, allowing them to focus on their careers. Relocating a life to move a career forward is no small thing. Atlanta Fine Homes Sotheby’s International Realty understands this and takes pride in elevating transition to an art form. Through global connectivity and local expertise, move management becomes more than just logistics; it’s the opportunity to build a better life, leverage talent and solidify bonds. 

Residential Outlook for 2024  

As we step into 2024 armed with the knowledge of market trends, demographic shifts and the influence of key industries, Atlanta’s real estate landscape promises a dynamic and bright future. Whether you are a buyer, seller or investor, understanding these intricacies allows for informed decision-making in this ever-evolving real estate market. The Atlanta market’s resilience and adaptability is a beacon of opportunity and growth in the years to come.  

This all translates to the idea that real estate is one of the greatest opportunities we have in Georgia.  Atlanta Fine Homes Sotheby’s International Realty can help incoming companies and their employees find the right properties for their needs.

Contact me at [email protected].  

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