Clayton home values rebounding as inventory dips below metro average
A decade ago Clayton County was ground zero for foreclosures in metro Atlanta and finding an outrageously good deal was as easy as getting stuck in Atlanta traffic.
Like most of the metro Atlanta area, the southside community is facing a housing crunch. Clayton has only about 1.9 months of inventory of previously-owned homes for sale compared to the metro Atlanta average of about 2.6 months of such structures, according to housing market data company Metrostudy.
New construction inventory in Clayton also is lower at about 7.1 months compared to a more normal eight months.
“Basically there is a shortage on the resale side and there’s a shortage on the new home side as well,” Eugene James, central region director for Metrostudy, told the Clayton County Commission recently. “I’m expecting to see developers come before you and say, ‘Hey, it’s time to begin moving dirt again.’”
That’s a big turnaround for a county that was arguably the hardest hit in metro Atlanta by the Great Recession.
When the economy tanked in 2008, unemployment in Clayton exploded, reaching as high as 14 percent in 2011. Hundreds of homeowners lost their homes to subprime mortgages, which were over-represented in the county.
But that’s all in the past. The district won back its accreditation in 2016 and MARTA began servicing the community in 2015. Now, this year’s lower inventory means housing also has stabilized.
The median price for a new home in Clayton has climbed to around $200,000 and about $131,000 for the resale of a pre-owned home.
Altimese Dees, a real estate agent who operates the website ComeHome2Clayton.com, agreed.
“Clayton County real estate has developed into Atlanta’s best bang-for-your-buck housing market,” Dees said. “You get a lot of house for the money, and we’re only minutes from downtown Atlanta.”
In some cases that is already happening. Construction starts for townhomes are up 53 percent over the year before, and closings on the structures are up 78 percent, James said.
McKinley Homes, for instance, is building Old Ivy Place, a townhome community in Jonesboro with prices starting around $140,000. Leaders with the company said with inventory being so low, it was clearly time to make more investments in Clayton.
“We have had success in Clayton County with the Gardens of Lovejoy, so we recognized a need for this type of product,” said McKinley’s marketing manager Kimberly Slaughter. “Buyers are looking for affordable homes and we are able to build a product they can afford at Old Ivy Place. Home values are going up and are expected to increase by 3 percent in the next year, making this community a very attractive investment.”
Buyers’ successes, however, have been mixed.
Balance is a challenge
Brandon Thompson said he and his wife searched for a home for about two months before finding a three-bedroom, two-bathroom house in Rex. They looked at about 20 houses before they found the $137,000 split-level they recently purchased.
“We almost closed on two other houses, but someone put it under contract before we could get it,” he said. “This particular house, we outbid other people and we got it.”
Andria Hall and her husband James also recently purchased a $300,000, 4,000-square-foot, five-bedroom house in the Lake Spivey area, but Clayton was not first on their list. Even though they live in Riverdale, they searched Fayetteville, Lilburn and Douglas County before deciding to look in Clayton.
“We thought why don’t we just look in Clayton County because the area seems to be coming back,” she said. “And the school system is pretty good in this area, it’s close to the highway and my husband likes the golf course. So we are very happy with the house we got.”
Annette Gilbert, however, has not been so lucky. She’s looking for a townhome or four-bedroom house for no more than $140,000, but hasn’t found anything. She was warned that the market was tight, but had expected to have a little more luck than she’s had.
“It’s harder than I thought,” said Gilbert, who has been looking in earnest since late March but has casually searched for more than a year. “It’s almost discouraging.”
Part of the problem is a large percentage of the houses that could be purchased — some say as much as 35 percent — are in the hands of investors who rent them, further tightening the county’s housing market.
Clayton has also been slow to attract the development of walkable communities anchored by cafes and independent restaurants that today’s buyers desire.
“If they could have more live, work, play communities, that would help Clayton,” said Torrence Ford, a broker with RE/MAX Premier in Atlanta. “People want restaurants and shops. If Clayton could give tax incentives to restaurants and small businesses that would generate buzz.”
Still MetroStudy’s James said he expects building to increase in the county, especially for first-time homebuyers.
“There is massive pent-up demand for homes in the first-time homebuyer price points throughout metro Atlanta,” he told Clayton Commissioners at the recent meeting. “This pent-up demand places Clayton County in the eyes of many potential homebuyers, builders and developers. Prepare for that added growth.”
Commissioner Felicia Franklin Warner welcomed the added residents, but wondered if the county could attract more construction of higher-end housing to balance what they see as the overbuilding of starter homes.
“The challenge for us is having that balance between [starter] homes versus those that are a little bit upward,” she said. “We’re not saying we need to get to Atlanta [levels] where everything is $500,000, but we do need to balance out.”
Kennesaw State University economist Roger Tutterow said communities shouldn’t feel compelled to have a product for every level, but should excel in their given niche.
“We don’t have a metro area that is homogeneous,” he said. “I don’t think communities should try to be everything to everyone”
But Josh Meddaugh, a political science professor at Clayton State University, said he gets where the commissioners are coming from. They want to encourage the first-time buyers, but know that more established homeowners typically invest more in the community in activism, investment and participation.
Offering more options for homes keeps them from fleeing across county lines and leaving leadership holes in neighborhoods or on community organizations, he said.
“Usually if you have some kind of career that pays well it give you more freedom with time to be involved in a school, be involved in the community or maybe run for office,” he said. “You want to encourage those people both at the early part of their career and when they have reached the top levels.”