Athens, GA 2018 Real Estate Market Predictions

Home values steadily increased throughout the country in 2017, and the Athens, Georgia area had no trouble keeping up. Athens homes have long been known to hold their value over other areas of Georgia, and this year will be no different.

Plans for 2018 include new home building in Athens and land development for residential housing construction, currently selling for an average of $100 per square foot, as both new and existing home sales are expected to improve even more. Despite new home prices falling throughout the fall and winter seasons of 2017, builder confidence remained high throughout the southeast. Housing market indicators predict builder confidence to grow even more as the 2018 spring home buying season approaches.

Job Growth

Athens, Georgia is experiencing slow but steady job and wage growth with declining unemployment, on par with the rest of the nation, supporting housing affordability. Construction will lead the way in job growth in Athens, as the area invests more in training younger workers in the skilled trades to combat the industry’s continued labor issues. With planned investments in workforce training centers and a median resident age of 26 years, Athens is expected to increase its construction productivity, despite decreases in construction productivity due to an aging skilled labor workforce throughout much of the rest of the country.

Federal Interest Rates

Recent 2017 federal interest rate hikes, indicating continued low unemployment, low inflation, and steady job and wage growth, contributed to higher builder confidence in winter than in the spring of 2017, foretelling of favorable conditions for new building and existing home sales for 2018. New home prices fell slightly in December of 2017 but are expected to rise, in part due to the gradual expected rise in interest rates to 5% 2018.

Consumer confidence and buyer demand will continue to increase as buyers scramble for what may be the last couple of years of low-interest home loans, as rates continue a gradual upward trend in 2018 and beyond. Markets are expected to face some short-term volatility following the expected 2018 rate hikes, but due to other factors influencing housing, the housing market is expected to adjust quickly and find its volatility short-lived, as it did after the latest increase in the federal interest rate in the latter part of 2017.

Increases in Affordability

Second only to the effects of interest rates on the housing market is affordability. Saving for a down payment for a home has been the number one obstacle to home ownership in recent years, but demand will grow, nationwide, as new tax laws and economic growth provide workers with the income they need for these down payments, as income gains begin to catch up with rates of rising home prices. Declining unemployment in Athens and increases in education will also improve affordability in this area.

Increased Home Values

Home values in the southeast region of the United States, including Athens, GA, are expected to increase at a rate second only to homes in the northwest in regions of the country, following the expected improvements in economic vitality in these areas. While the pace of construction has improved slightly after several years of slowdown, demand for homes will continue to outpace supply in Athens, driving up home values an estimated 4 percent, on average, in 2018.  Entry level home building is expected to grow, especially, as the Athens-Clarke County finalizes plans for significant 2018 land development. These land-use plans will keep rising home prices in Athens affordable, as lot availability begins to improve.

Plans for Housing in Athens

As part of its plan for 2018, the Athens-Clarke County planning department has planned new land uses that will provide ample opportunity for residential construction this year. Planning maps for 2018 include a new category in the area for mixed residential and commercial land use, including a corridor residential area allowing up to 10 units per acre, a neighborhood mixed use area, allowing for up to 15 units per acre, and a residential mixed-use area, allowing 8 units per acre. New traditional and rural neighborhoods have also been planned by the development commission of Athens, as well as land development for single family home building in other residential areas not connected to a neighborhood.

Conclusion

The housing market in Athens is expected to improve more quickly than the nationwide market this year, with improved lot availability keeping growth in check.  A brief dip in housing may be seen for a brief period while the market adjusts after several interest rate increases this year, but other factors affecting the industry will allow the housing market to quickly bounce back and continue a path of growth and expansion. The youth of the Athens workforce and the area’s dedication to skilled workforce training initiatives will keep the industry strong in Athens, as Athens leads the way to renewed vitality in its own housing market.

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