The Augusta Real Estate Market: Still a Good Investment in 2020?

There’s more demand than supply for housing in Augusta, according to experts who spoke at a recent luncheon sponsored by the Georgia Economic Outlook. In fact, workforce development and housing availability are two of the biggest issues that need to be addressed as population and jobs in the region continue to grow.

Augusta, Georgia is on the central eastern border of the state and lies just across the Savannah River from South Carolina. The area boasts a warm climate, pleasant Southern living lifestyle, and is home to The Masters golf tournament at the prestigious Augusta National Golf Club.

Founded a generation before the Civil War, Augusta is now home to a thriving economy centered around medicine, biotech, and cybersecurity. Job seekers are attracted by the diverse employment opportunities, families love the nearby suburban towns, and retirees are attracted by the warm weather and low cost of living.

Keep reading to learn why investing in the Augusta real estate market will still be good in 2020.

>>Explore Roofstock's Augusta Investment Properties here.

 

Population Growth

A couple of years ago, Forbes wrote that Augusta may be the South’s best kept secret. But judging by the recent population growth in Augusta, it looks like the secret is out. In fact, over the next five years, about 13,000 new residents are expected to move to the Augusta area, helping to keep the real estate market strong and steady.

Key Population Stats:

  • Augusta is the 2nd-largest city in Georgia (just behind Atlanta) with a population of about 200,000 in the city and more than 600,000 residents in the Augusta-Aiken metropolitan area.
  • Augusta MSA includes Richmond, Columbia, Burke and McDuffie counties in Georgia and Aiken and Edgefield counties in South Carolina.
  • Over the last ten years, the population of Augusta has grown by 8.5% with about half of that growth arriving in the last five years.
  • Unemployment is around 2.9%.
  • Job growth in Augusta was 1.7% last year with a metro area cost of living 8% below the national average.
  • Median age in Augusta is 39.5 years with a high concentration of Millennials.

 

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Job Market

The University of Georgia Terry College of Business expects job growth in Augusta to match the state’s growth rate of 0.5% this year while increases in wages and benefits should be about 2%. 

A little more than 50% of the workforce resides in Richmond County where Augusta is located. Nearly 30% live in Columbia County, with a high volume of commuters coming from neighboring Aiken County in South Carolina.

Key Employment Stats:

  • GDP of the Augusta-Richmond County MSA is more than $28 billion, according to the Federal Reserve Bank of St. Louis, and has grown by more than 30% over the last ten years.
  • Job growth rate in Augusta is projected to be 0.5%, matching overall job growth in the State of Georgia.
  • Median household income is $50,863 and per capita income is $25,163.
  • Forbes gives Augusta high rankings for cost of doing business, job growth, education, and #156 in the U.S. as the best place for business and careers.
  • Growth industries in the Augusta metropolitan area include cyber security and IT, advanced manufacturing, aerospace, chemical manufacturing, customer service centers, logistics and healthcare services.
  • Tech and cyber-related organizations such as Unisys, ADP, Raytheon, and the U.S. Cyber Command at Fort Gordon Army base help drive the high-tech industry in Augusta.
  • Fort Gordon has a workforce of more than 15,600 military and more than 10,300 civilians and creates an annual economic impact of about $2.4 billion in the local economy.
  • Major manufacturing employers in the Augusta metropolitan area include golf cart and utility vehicle manufacturer EZ GO Textron, Cardinal Health, Kellogg’s, Augusta Coca-Cola, and Dart Container.
  • Augusta University, Richmond County School System, University Hospital, and Augusta-Richmond County are a few of the biggest public sector employers in the metropolitan area.
  • Major colleges and universities include Augusta Technical College, Augusta University, Paine College, and Georgia Military College.
  • 83.5% of the residents in Augusta are high school graduates or higher, and 21.5% hold a bachelor’s degree or an advanced degree.
  • Interstate highway I-20 connects Augusta with Atlanta to the west and Columbia, South Carolina to the east.
  • Ports of Savannah, Georgia and Charleston, South Carolina are less than 150 miles from Augusta.
  • Augusta Regional Airport provides direct service to Atlanta, Charlotte, Dallas, and Washington DC via Delta and American Airlines.

 

Real Estate Market

The housing market in Augusta is on the rise, similar to much larger cities like Pittsburgh, Baltimore, and Buffalo (but without the freezing winter weather), according to WRDW in Augusta. Economic stability and job security are two of the factors making the real estate market in Augusta so strong.

Key Market Stats:

  • Median listing price of a house in Augusta is $139,900, according to Zillow (as of January 2020).
  • Square foot listing price of a home in Augusta is $85 vs. $102 per square foot in the state of Georgia.
  • Homes values in Augusta have increased by 4.0% last year and by more than 36% since December 2012, based on the Zillow Home Value Index.
  • Average days on market is 69.
  • During the listing period 12.5% of the houses for sale in Augusta have a reduction to the asking price.
  • 5.3% of the homes in Augusta have a negative equity vs. 8.2% U.S. average.
  • None of the homes in Augusta have a delinquent mortgage vs. 1.1% nationally.
  • Jamestown and Pepperidge are two of the neighborhoods in Augusta with the highest median Zillow Home Value Index.
  • Meadowbrook and Barton Chapel are two of the neighborhoods in Augusta with the lowest median Zillow Home Value Index.

 

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Strong Renters’ Market

A growing number of investors are leaving Atlanta and investing capital in rental property in smaller markets like Augusta and Savannah, according to REBusinessOnline. Yields are higher, cap rates are better, and there are a growing number of renter households.

Key Market Stats:

  • Median rent in Augusta is $961 per month vs. $1,190 
  • Rents in Augusta increased by 9% last year, according to RENTCafé.
  • 38% of the households in August rent rather than own.
  • 56% of the rental units in Augusta have monthly rents of between $701 and $1,000
  • Neighborhoods in Augusta with the highest rents include Laney Walker, May Park, and Old Town where average rents run $963 per month.
  • Neighborhoods in Augusta with the lowest rents include Albion Acres, Greggs Mill, and Harrisburg where average rents run $666 per month.
  • Most popular neighborhoods in Augusta for renters include Belair, Martinez, and Aylesbury where rents average $875 per month.

 

Historic Price Changes & Housing Affordability

Two important data sets that real estate investors analyze before investing in rental property are the historic change in home prices and the affordability of housing. Pricing data is used to help forecast the potential appreciation of a home, while affordability is used to gauge the current and future potential demand for rental property.

Each quarter the Federal Housing Administration publishes an updated house price index report. The most recent FHA 2019 Q3 House Price Index for Augusta (including purchase and refinance mortgages) shows that:

  • Over the last 5 years house prices in Augusta have increased by 21.24%
  • Over the past one year house prices in Augusta have increased by 3.86%
  • Last quarter house prices increased by 0.82% in Augusta

Kiplinger recently published a report showing the affordability of housing in the top 100 metro areas of the U.S. The firm’s affordability index is on a scale of 1 to 10, with 1 being the most affordable place to buy a home and 10 being the least affordable.

The affordability index report for Augusta shows:

  • Since the last real estate cycle market peak in May 2006, home prices in Augusta have increased by 6.8%.
  • Since the last real estate cycle market bottom in March 2012, home prices in Augusta have increased by 25.3%.
  • Augusta has an affordability index of 1 out of 10, meaning that Augusta is one of the most affordable markets in the country to buy a home.

 

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Quality of Life

Augusta is rated by U.S. News & World Report as one of the best places to live and retire in the U.S. The city receives strong ratings for desirability, value, job market, quality of life, and net migration.

Key Quality of Life Stats:

  • Cost of living is 8% below the national average, according to Forbes.
  • Climate is humid subtropical with short mild winters and hot humid summers.
  • Golfing is a year-round event at the area’s 15 public and 20 private golf courses, and the Augusta National Golf Club is home to The Masters golf tournament.
  • Opportunity abounds for outdoor recreation along the Savannah River and Augusta Canal.
  • Augusta Downtown Historic District includes most of downtown and its pre-Civil War area.
  • University Hospital-Augusta and Children’s Hospital of Georgia are among the top 14 best hospitals in Augusta.
  • Petersburg boat tours, Historic Trolley Tour, and the Black History Trolley Tour are a few of the most interesting ways to get to know Augusta.

 

Get Out the Map

Where to begin your search? Roofstock created a heat map of Augusta 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.

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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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Jeff Rohde

Author

Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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