Atlanta Hit Hard by Downturn

Atlanta was recently named the third-emptiest city in the country by Forbes (behind only Las Vegas and Detroit), based on Atlanta's rising homeowner and rental vacancy rates. Here's what that means for remodelers.

March 31, 2009
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Market Update

There are certain lists you don't want your city to be near the top of. Foreclosure rate would certainly be one of those, spelling bad news if you're a remodeler in Atlanta.

While not hit as hard as the California and Florida markets, Atlanta was still a Top 20 market for foreclosures in 2008, according to RealtyTrac. Outside of those markets, only Las Vegas, Detroit and Phoenix ranked ahead of Atlanta.


Atlanta's rising home vacancy rate, combined with a 16.1 percent rental vacancy rate, prompted Forbes to name it the third emptiest city in the country.

The city was also recently named the third-emptiest city in the country by Forbes (behind only Las Vegas and Detroit), based on Atlanta's rising homeowner and rental vacancy rates.

That's led to less work for remodelers in the city, and those homeowners who are looking to remodel are reducing the scope of their projects, says Brad Cruickshank, president of Atlanta-based Cruickshank Remodeling.

"Most people are not remodeling to do a showplace kitchen to keep up with the neighbors or for resale," he says. "They're doing projects that will make their lives better."

Even high-end clients have been affected, as they're less confident in the market and the value of their homes, says William Bartlett, president of Home Rebuilders in Atlanta.

"People are fearful of over-improving their homes," he says.

Home Rebuilders has seen average project size drop from $200,000 to less than $100,000 since September, as clients focused on improving their living space without making expensive upgrades.

Cruickshank and Bartlett both think the Atlanta market could turn around later this year as people opt to stay home and invest in their houses instead of spend money on items such as expensive vacations.

"What I see in Atlanta is that there are a lot of people who really want to do something," Bartlett says. "I think the hysteria's gone. We're standing on a bottom, and I think we're going to grow out of it."

Specialty 2007 Installed volume
Weidmann & Associates Design/build remodeler $6,987,500
Rembrandt Remodeling Full service remodeler $6,800,000
Home Rebuilders Full service remodeler $5,367,168
Cruickshank Remodeling Full service remodeler $4,474,000
Atlanta Decking & Fence Co. Outdoor living $4,200,000

 

Market Update

Some of the key economic indicators from Atlanta

Metro Area Population: 5,278,904 (24.3 percent increase since 2000)

Change in home values: Down 3.82 percent since 2007; up 11.1 percent over last five years

Existing home sales: 2008 sales were down 18.5 percent from 2007

Median household income: $44,163

Home vacancy rate: 6.3 percent (sixth-highest in the country)

Unemployment rate: 8.7 percent (up from 5.2 percent in 2008)

Sources: U.S. Bureau of Labor Statistics, U.S. Census Bureau, Office of Federal Housing Enterprise Oversight, Atlanta Journal-Constitution's 2008 Home Sales Report/SmartNumbers

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