Population Growth Fuels Bright Future for Atlanta Multifamily Market

By Will Mathews and Mike Kidd of Colliers

What is the reason for Atlanta’s explosive growth over the past 20 to 30 years? Simply put, it is the exponential increase in population driven by an influx of new residents from the Northeast, Midwest, and Mid-Atlantic. Atlanta is home to 17 Fortune 500 companies (the nation’s third-largest market), plenty of good-paying jobs, a culturally diverse population, and several prestigious universities, laying the groundwork for incredible net migration.

Multifamily investors are attracted to Atlanta, as evidenced by the high volume of multifamily transactions in the area. According to MSCI Real Capital Analytics, Atlanta is currently ranked No. 4 in the country behind New York, Dallas and Los Angeles in terms of transactions. Despite the challenges of new supply and systematic traffic issues, the future of Atlanta’s multifamily market is very bright for a number of reasons.

7.9 million by 2050

According to the Atlanta Regional Commission, Atlanta’s population will reach 7.9 million, an increase of 1.8 million people between 2020 and 2050. One direct beneficiary of population growth is rents for multi-family housing. Given recent demographic trends, rent growth is expected to peak in suburban counties east of Atlanta.

Demand keeps pace with new supply

According to Yardi Matrix, more than 22,000 market-rate homes were delivered in the Atlanta MSA in 2023, and more than 34,000 homes are expected to be delivered in 2024 and 2025. This makes Atlanta one of the top markets in the largest supply of new housing in the country, behind New York, Dallas, Austin, Phoenix and Houston.

Even as the supply of new housing reaches a record high in Atlanta, demand is expected to keep pace with or even exceed supply, largely due to substantial population growth and net migration. From 2026, the supply of new homes is expected to decline as interest rates impact the availability of construction financing.

2.8 million jobs attract new residents

The lure of Atlanta’s job market, which is expected to create an additional 856,000 jobs by 2050, according to the Atlanta Regional Commission, is attracting a significant wave of incoming residents. Home to the world’s busiest airport and Fortune 500 companies, such as Delta Air Lines, The Home Depot, Coca-Cola and UPS, Atlanta is supported by a strong academic base, including Emory University, Georgia Tech and Georgia State University.

Major technology companies like Microsoft, Google, Equifax, and Visa continue to expand their presence in Atlanta, giving the city its nickname “Silicon Valley of the South.”

Rapidly rising housing prices help multifamily landlords

Average home prices in Atlanta have increased 65% since the start of 2017, according to Zillow, far outpacing average rent growth over the same period. Combined with the highest mortgage rates in more than 10 years, housing affordability has become increasingly challenging, but represents a potential boon for multifamily owners.

Many residents forgo buying a home and continue to rent out of necessity. If housing prices and interest rates do not decline between now and the record decline in new construction supply in 2026, there is potential for rental rates to rise similar to those in 2021 and 2022 .

The build-to-rent sector is taking off

Fueled by a large and expanding millennial population of households and, therefore, looking for more space, build-to-rent communities are springing up throughout the Atlanta MSA. Mainly concentrated in suburban and peri-urban areas, where land is cheaper and permits and zoning are more attractive, units built for rental increased by 1,500 units between 2017 and 2023, an increase of 380% according to The Voice of Atlanta. Built-to-rent communities offer larger homes, typically with private yards and garages, a neighborhood feel, community amenities, and flexibility and affordability in the face of the rapid rise in property prices.

New developments spark growth opportunities

Led by CIM Group, Centennial Yards represents a strategic partnership between the City of Atlanta and private equity to revitalize a key piece of Atlanta real estate. Located adjacent to Mercedes-Benz Stadium and State Farm Arena, Centennial Yards will transform acres of parking lots and railroad tracks into a vibrant mixed-use entertainment district. At an estimated cost of $5 billion, Centennial Yards will create a “mini-city” and serve as a catalyst for economic growth in downtown Atlanta. With delivery in multiple phases, the goal is to have the majority of the Centennial Yards project ready for the 2026 FIFA World Cup, which Atlanta will host along with other U.S. cities.

Together, Atlanta’s many attractions, plentiful job opportunities, and good weather will continue to attract waves of new residents. Rapid population growth will continue to fuel rental growth and stable occupancy rates. Built on strong market fundamentals, the Atlanta multifamily market represents an excellent investment for years to come.

— Will Mathews is vice president and director of Colliers, and Mike Kidd is vice president of multifamily operations at Colliers. This article is scheduled to appear in the July 2024 issue of Real estate company in the southeast.