Despite economy’s rumblings, Atlanta looking up

From Commercial Property News:

Atlanta is on the rise, and now is the time for the commercial real estate
industry to jump on the opportunities that are coming with the city’s growth,
according to real estate experts at CPN’s annual Atlanta Property Opportunities
Conference. Over 150 market executives attended the panel discussions, held this
morning at the Grand Hyatt Atlanta in Buckhead.

“Atlanta had experienced a big decline beginning in the ‘70s in to 2007, but the city is back,” said Cheryl Strickland, managing director of tax allocation districts for the Atlanta Development Authority, who opened the conference as the keynote speaker. “And there is a lot more growth predicted, so think smart growth and infill.” The city expects a population of 7.3 million by 2030, and will account for over 80 percent of the growth in the state.

and:

Despite the rumblings in the national economy, there are a lot of good things
going for the Atlanta, Strickland concluded. “I hope you can see the
opportunities,” she said.

Indeed.

As other parts of the country experienced hyper-appreciating home prices as the housing bubble inflated, the overall Atlanta market saw, for the most part, slow and steady gains. Now that prices are in free fall elsewhere, the loss in value for Atlanta real estate is mild in comparison. In other words: we didn’t see home prices rise as quickly as did other areas, and prices haven’t fallen as fast, either.

Tempering the loss in home value here has been Atlanta’s increasing population. While there is no denying that prices are falling in Atlanta, prices are falling over three times as fast in Detroit, which has lost more residents over the past few years than any other city except hurricane-battered New Orleans.

Atlanta is, and remains, a desirable place to live. People want to be here. And as more and more people move to the city, there will be a demand for homes.

Photo: Sunny Side Up, originally uploaded by code poet.

New home construction at 17-year low

From CNN:

Initial construction of U.S. homes fell to a 17-year low in March, a much
steeper-than-expected drop, according to a government report released Wednesday.

Privately owned housing starts fell to a seasonally adjusted 947,000
annual rate in March, according to the Commerce Department. The rate was down
11.9% from February's revised reading of 1.07 million and 36% lower than March
of 2007.

Economists were expecting housing starts to decline to 1.01
million, according to consensus estimates compiled by Briefing.com.

and

New construction of single-family homes, considered the core of the housing
market, were at a rate of 680,000, or 5.7% below last month's number.
Single-family housing starts have not been this low since May 1980.

Applications for building permits, considered a reliable sign of future
construction activity, fell to a seasonally adjusted annual rate of 927,000 in
March. That's 5.8% below the revised 984,000 rate in February. Economists were
expecting permit applications to fall to 970,000.

Because of the overwhelming glut of housing inventory, both new and existing homes, this is a necessary step in eventually finding the housing bottom. Only when the level of new construction, when combined with existing-homes offered for sale and lender-held REOs drops to a point where it is sustainable by new mortgage issuances will there be a hope of recovery.

Until that time, expect there to be a race to the bottom in prices as homebuilders, home sellers, and REO departments all scramble for the few mortgage loans out there.

Photo: Construction Love, originally uploaded by Ramperto.