Today is Sunday and it seems like the pandemic has been dragging on forever. There have been highs and lows at every turn.
While some people are struggling to keep the mortgage or rent paid each month, there are some who are purchasing their first home. With interest rates at their lowest, there was a short-lived mad rush to take any home available in 2020.
Now the summer of 2021 and there is a slowdown. The demand for homes in Georgia is high but the supply is low. People who already have a home are staying put, and others will continue renting until the market turns around.
This isn't the first housing crisis or even a new one. More likely a continuation of the housing bubble that burst around 9/11.
So what is going on here? Will housing ever become affordable in Georgia? And why is there a lumber shortage?
Let's take a dive in.
Population Growth & Housing
According to an article by U.S. News, between 2010 and 2019 the population of Atlanta, GA grew to 700,000.
This rapid growth meant houses were being bought up by the thousands. It also meant that rental prices went skyrocketing. While new growth in a city can be seen as a good thing, many residents found that Atlanta was getting too crowded.
Atlanta Mayor Keshia Lance Bottoms is making reforming zoning laws that would bridge the wage gap and keep housing prices from up any further. She wants to do this by creating more density.
However, most people are concerned about the increase in prices and stagnant wages. Without a livable wage, it will be difficult to save up for a home and pay rent at the same time.
Why Low-Interest Rates Mean Nothing
This is more of a seller's market. Interest rates are low but the actual prices of homes are going through the roof.
Plus, since 2020, there have been only 8,767 listings. So even with low rates, the chances of finding a house that doesn't already have hundreds of applicants is impossible. According to Norada Real Estate, 50% of Georgia residents are renters. Yet, rent continues to go up even during the pandemic.
So, people are stuck between a rock and a hard place. They have to continue paying more for rent and the homes available are just too high.
Will there be Enough Lumber to Build More Homes?
This is probably the biggest concern people have with the housing shortage.
Last year, according to AJC, the situation began in 2020. Sawmills in Georgia feared a recession and quickly cut production. But then lumber demand rapidly went up and sawmills couldn't keep up with demand.
So, it's not really a shortage in the sense that we ran out of trees in Georgia. More like the sawmills are trying to play catch-up.
Eventually, they will catch up and so will housing. Everything will even itself out but it may take a while. For those of you who want to buy a house but don't want to scramble for high prices, rest easy. These things tend to change and fluctuate.
Right now it's the best time to sell, soon it will be a buyer's market.
Until then, stay safe everyone.