The Palmer House apartments in Midtown Atlanta
Photo: Christopher Oquendo & Fast Copy News Service
Photo: Christopher Oquendo & Fast Copy News Service

Metro Atlanta rents rise, still lag home prices

Rents have been rising in Atlanta, but not fast enough to outpace the rise in housing prices.

Moreover, even after several years of climbing rents, the region’s apartments remain more affordable than in many other big U.S. metro areas.

“Some other large cities have seen more substantial increases,” said Andrew Woo, data scientist for ApartmentList, a San Francisco-based online source for rental information. “Atlanta is still more affordable than most other large cities across the country.”

For instance, San Francisco’s median rent for a two-bedroom apartment is $3,040, Woo said. In Atlanta, the two-bedroom median is $1,160, Woo said.

Financial advisers often suggest that a household not spend more than a quarter of its income on housing each month.

Parker Carlson, 25, busts right through that ceiling. He lives Buckhead and tosses about 40 percent of his monthly income into rent payments, which he blames partly on the owners’ habit of buffing up property “to ensure that they are staying up with the times and getting the most money that they possibly can.”

The other half of the equation has not kept pace, he said. “While the cost of living has gone up, the average entry level position salary has increased only slightly.”

Morever, the strain of making the rent is relative.

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Courtney Arnold, 30, recently moved from St. Petersburg to Old Fourth Ward section of Atlanta. Her monthly rent jumped about $450 per month, and she has a smaller space to live in.

She’s not complaining, she said.

“I commonly hear from people who just moved here from New York how affordable rent is in Atlanta. So, I guess it’s all about perception,” she said.

Among the nation’s large metros, Atlanta is the 15th most expensive rental market, according to Abodo.

Kristin Kirkpatrick, 27, rents in the south section of Buckhead near Midtown and devotes about 30 percent of her monthly income to rent.

“Generally speaking, I think that rent costs in Atlanta are pretty reasonable. You obviously get what you pay for in terms of location, but they are doable if you’re smart with your money.”

Rents in Atlanta have gone up 2.4 percent in the past year, according to Apartment List.

Different companies offer somewhat different numbers.

For example, Zumper puts the two-bedroom median in Atlanta at $1,620, up 3.8 percent in the past year.

But whatever data you use, it does look like rents are rising – and home prices are climbing faster.

According to calculations by professors at Florida Atlantic University, since late 2009, it has made more financial sense to buy a home in metro Atlanta – thanks to a collapse in home prices and historically low mortgage rates. But as prices have rebounded, the buy-or-rent balance has been steadily tilting back.

It is now just barely in the buy zone, according to the FAU index.

As enthusiasm for buying wanes, that will help rebalance the demand-heavy homebuying market, according to FAU real estate economist Ken Johnson, one of the originators of the index. “This shift should slightly lower the demand for ownership and contribute to the slowdown in housing prices around the country.”

The FAU index lists 11 of the 23 largest metros as places to purchase rather than rent — with the “buy” light flashing urgently in like Chicago, Cincinnati and Cleveland. Atlanta is one of nine — including Minneapolis, Miami and Philadelphia – rated as toss-ups.

Dalton Long, 22, currently rents Emory University housing in Brookhaven while he commutes to Athens for classes at UGA. He spends $730 a month on rent, which includes utilities. He plans a move to Midtown in August, and he expects to pay up to $1,100 for rent alone, around a third of his monthly income.

“Prices are ridiculous,” Long says. But because he wants to live in Midtown he’s willing to pay the price.

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