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Strong Job Growth Drives Hugely Impressive New Construction Numbers in Atlanta

by Peter Thomas Ricci

Atlanta’s new construction marketplace put up some smashing good numbers in 2014’s fourth quarter.

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Creative Commons 3.0: http://commons.wikimedia.org/wiki/File:Rumson_New_Home.jpg

Here’s a nice blast of good news about Atlanta’s housing market: in 2014’s fourth quarter, housing starts hit a 16,437 annual rate, an 18 percent increase from Q4 2013; furthermore, there were 3,993 total starts in the fourth quarter, itself an 18 percent year-over-year increase.

That was the finding of a new study from Metrostudy, which analyzed housing starts and new single-family home closures in Atlanta’s new construction marketplace.

In regards to closures, Metrostudy reported an annual rate of 14,815 in the fourth quarter, up 22.6 percent year-over-year; specific to the fourth quarter, the 4,087 closings were up 19 percent, a pronounced divergence from the declining sales in Atlanta’s resale market.

Strong Economy Pushes New Home Market

The key to Atlanta’s surging homebuilding marketplace is its strong economy. Per Metrostudy’s analysis, we learned the following, encouraging statistics:

  • Through Dec. 2014, net jobs in Atlanta were up by 67,400 positions, a 2.6 percent year-over-year increase.
  • At the end of 2014, Atlanta was the eight-most populous metro area in the U.S., and it ranked seventh for job growth and third for single-family building permits.
  • And finally, foreclosure activity is now at a 12-year low, and REO inventory continues to decline; in the fourth quarter, 21 percent of all existing-home sales were REO properties, down from 25 percent in 2013.

Eugene James, the regional Director for Metrostudy, elaborated on those statistics in his accompanying comments.

“The Atlanta metro area is creating jobs at a healthy pace, up 2.6 percent year-over-year and has averaged above 2.3 percent growth for the past two years,” James explained. “With 2.51 million people now employed, Atlanta has set a new record for total people employed.

“Despite good job growth, unemployment was relatively high due to migration into the region thus expanding the labor force faster than the economy could absorb. But solid job growth has spurred consumer confidence which is helping to move the housing market toward a stronger recovery. 2015 should be another good year for housing in the Atlanta region.”

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