Home values are getting hotter in Georgia, according to MoneyWise, and Athens is no exception. One reason values keep rising is the demand for rental property in the market.
Last year, the percentage year-over-year rent increase in Athens placed it in the top 10 cities in the U.S. with the biggest increases in rents. Other places making the list included Thousand Oaks and Santa Clara, California; Wilmington, North Carolina; and Birmingham, Alabama.
Athens is about a one hour drive from Downtown Atlanta, and is part of the Athens-Clarke County MSA and home to the University of Georgia, the state’s renowned public university and research center. Established and new technology startups help drive the economy, along with biotechnology firms and manufacturing, and the tourism industry.
The city is also known as the birthplace of several well-known alternative rock and new wave performers such as R.E.M., The B-52s, Indigo Girls, and Matthew Sweet. Climate in Athens is similar to much of Georgia and the Southeastern U.S., with hot and humid summers and short, cool winters.
Here’s more of what investors need to know about investing in Athens, Georgia in 2020.
Athens-Clarke County is ranked by WalletHub as one of the fastest-growing areas in the U.S. The firm analyzed 17 key measures of growth and decline for 515 cities in the country, reviewing data sets such as population growth, unemployment rate decrease, and growth in regional GDP. Athens has a higher growth rate than cities such as Columbus and Albany, Georgia, and Springfield, Illinois.
Key Population Stats:
- City of Athens is home to about 128,000 people with nearly 485,000 residents within a 45-minute drive of Downtown Athens.
- Over the last 10 years the population has grown by more than 9%.
- Athens gained 500 new residents last year and is projected to reach a population of nearly 130,000 in the next few years.
- Median age in Athens-Clarke County is 26.6 years vs. 37.7 years for the State of Georgia.
- Just north of Athens, Jackson County was the 10th fastest-growing county in the U.S., adding more than 2,700 new residents between 2017 and 2018, according to the Atlanta Journal-Constitution.
The University of Georgia expects job growth in Athens to be 0.5% this year, outpacing employment growth in other state cities such as Columbus, Macon, and Savannah. New companies, business expansions, and constructions are a few of the industry sectors driving the job market in Athens.
Key Employment Stats:
- GDP of the Athens-Clarke County MSA is more than $10 billion, according to the Federal Reserve Bank of St. Louis, and has grown by nearly 39% over the last 10 years.
- Unemployment rate is 2.5%, down from 3.6% the previous year.
- Athens is ranked by Forbes as the #6 best small place for business and careers, #20 in cost of doing business, and #28 in job growth.
- Aerospace machining, advanced materials manufacturing, and heavy equipment manufacturing are three of the target industry sectors in Athens.
- 14% of the labor force in Athens is employed in the manufacturing sector.
- Largest private employers in Athens include Piedmont Athens Regional Healthcare, Caterpillar Athens Plant, Pilgrims poultry products, DialAmerica, transport refrigeration equipment maker Carrier Transicold.
- University of Georgia and Clarke County School District are two of the largest public employers in the Athens-Clarke County MSA.
- Technology companies based in the Athens area include Roundsphere, Cogent Education, Partner Software, and Digital Insight.
- Pharmaceutical and biotechnology companies in Athens include Merial, Janssen Pharmaceuticals, Inc., and several biotechnology research centers hosted by the University of Georgia.
- Athens Technical College, Augusta University, University of Georgia, and Piedmont College are all in the Athens metropolitan area.
- 21.6% of the citizens in Athens have a bachelor’s degree or higher, while 87% are high school graduates or higher.
- Five U.S. Highways pass through Athens, including U.S. Route 29 running between Alabama and South Carolina and U.S. 129 to the Florida state line.
- Interstate Highways I-20, I-75, and I-85 are within 68 miles or less of Athens.
- Port of Savannah is four hours from Athens.
- CSX, Norfolk Southern, and Athens Line TAL provide rail service through the Athena Industrial Park.
- Ben Epps Airport in Athens provides commercial charter service, while Hartsfield-Jackson International Airport in Atlanta is a 1 ½ hour drive away.
Real Estate Market
There’s limited land in Athens where new single-family and multifamily housing can be built, which is one of the reasons why real estate prices in Athens keep rising. A second reason is that Athens is a college town, and students from the University of Georgia have the luxury of using their parents’ money to pay for off-campus housing.
Key Market Stats:
- Median listing price of a house in Athens is $219,000 while the median selling price is $178,000, according to Zillow (as of January 2020).
- Square foot listing price of a home in Athens is $120 vs. $125 per square foot in the greater Athens-Clarke County metropolitan area.
- Homes values in Athens increased by 8.1% last year and by 86% since May 2012, based on the Zillow Home Value Index.
- Average days on market is 66.
- During the listing period 8.2% of the houses for sale in Athens have a reduction to the asking price.
- 5.8% of the homes in Athens have a negative equity vs. 8.2% U.S. average.
- 0.6% of the homes in Athens have a delinquent mortgage vs. 1.1% nationally.
- Watkinsville and Bogart are two of the neighborhoods in Athens with the highest median Zillow Home Value Index.
- Winterville and Crawford are two of the neighborhoods in Tampa with the lowest median Zillow Home Value Index.
Attractive Renters’ Market
According to The Red and Black, the University of Georgia newspaper, workforce and student housing are two of the housing types seeing the most demand from renters in Athens.
The mayor-elect in Athens recently observed that there has been a lack of focus from developers on family workforce housing, creating a supply shortage. Also driving the rental market in Athens are students from the nearby University of Georgia who often opt for renting two-to-four bedroom houses rather than living on-campus.
Key Market Stats:
- Median rent in Athens is $1,397 per month vs. $1,450 in the Athens-Clarke County metropolitan area (as of January 2020).
- Rents in Athens increased by 4.7% last year.
- Athens ranked in the top 10 cities of similar size for the largest rent increases last year.
- About 61% of the households in the City of Athens rent rather than own vs. 46% in the Athens-Clarke County metro area.
- Two-bedroom rents in Athens are higher on average than in Augusta, Columbus, and Valdosta, according to the OnlineAthens edition of the Banner-Herald.
Historic Price Changes & Housing Affordability
Analyzing historic home price changes and the affordability of housing in a market are two ways that real estate investors can forecast the current and potential future demand for rental property.
When researching price change data, one good resource to use is the FHA’s quarterly house price index report. According to the most recent FHA 2019 Q3 House Price Index released for the Athens metropolitan area:
- Over the last 5 years house prices in the Athens-Clarke County MSA have increased by 38.43%
- Over the past one year house prices in the Athens-Clarke County MSA have increased by 3.77%
Tracking the affordability of housing in a market can also offer an idea of how many people will choose to rent rather than own.
The Housing Affordability Index (HAI) compares median family incomes to prices of median resale single-family homes. Of course, other factors may cause people to rent rather than own, such as lifestyle choices or a short supply of available housing.
HAIs use 100 as a baseline index number. The greater the affordability index is above 100, the more affordable a market is, and vice versa.
Based on the most recent HAI data through July 2019, the housing affordability index in Athens is 107 vs. 143 for the State of Georgia. This means that Athens is one of the less affordable places in Georgia to own a home, which could indicate a strong demand for rental housing in Athens.
Quality of Life
Athens is ranked by Niche.com as the #3 best place to live in Georgia, receiving top grades for nightlife, diversity, family living and public schools with a cost of living that’s 5% below the national average. The city is known for great music, fantastic food, and the Georgia Bulldogs.
Key Quality of Life Stats:
- Ranked the #8 “Best College Town for Startups” by Athens CEO.
- Sports Illustrated gives Athens the #2 ranking for “College Football's Greatest College Towns”.
- Rated by Forbes four years in a row as one of the best places to retire.
- Named the “Greenest City” in the U.S. by Insurify and one of “America’s Coolest Southern Towns” by Jetsetter.
- Georgia Museum of Art is the official state art museum.
- The annual Athens Twilight Criterium race attracts cyclists from around the U.S. and the world.
- Athens Piedmont hospital ranks as one of the best in the U.S.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Athens based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
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