Atlanta City and Five County Region Market Value Analyses

The Market Value Analysis (MVA) is an in-depth study and mapping of local housing markets. Done at a small geographic scale, it is able to reveal the mosaic of market conditions across a city or region and offers insight into the variation in market strengths and weaknesses within and between traditional neighborhood boundaries. Understanding different market types allows stakeholders to align investment or intervention strategies to market conditions. The MVA typically uses local and administrative data to represent market conditions, and includes field validation and input from local experts.

The MVA was created by  Reinvestment Fund , a nonprofit organization that uses financial and analytical tools to ensure everyone has access to essential opportunities. The first MVA was done in Philadelphia, Pennsylvania in 2001. Since then, RF has conducted MVAs for more than 50 other localities across the United States, including Nashville, Richmond, Dallas, and more. In Atlanta, Reinvestment Fund created two separate MVAs, one for the city of Atlanta and one at the regional level, including the entirety of Fulton, Dekalb, Clayton, Cobb, and Gwinnett counties.

Reinvestment Fund's approach and process of creating the MVA is illustrated below.

The MVA uses a technique known as cluster analysis to form distinct clusters, or markets, with common characteristics. These characteristics are measured by data indicators including sale price, permitting, and code violations. Each market cluster is identified by a letter of the alphabet and a color.

The table below shows the nine City of Atlanta MVA markets (as rows) and the characteristics that went into the cluster analysis (as columns). The bottom row is the city average, so one can see how each cluster compares. The gray markets (A - B), have the highest home sale prices in the city, higher shares of older homes (built before 2000) and homeowners, and low levels of distress. The purple clusters (C - D) also have high home sale prices, high levels of permitting, low levels of distress, and varying levels of homeownership and density. Blue markets (E - F) have home prices slightly below the city average, and E markets have the highest share of new homes and high density, while F markets are transitioning areas with substantial amounts of permitting and double the level of code violations and vacancy compared to the typical block group in the city. The orange (G) cluster has the highest permitting levels in the city, high levels of distress, and is predominately renter occupied and has a high share of households accessing subsidized rental housing. Yellow markets (H - I) have the lowest home sale prices in the city, and H markets have low levels of permitting and distress and higher levels of subsidy, while I markets have the highest levels of code violations and vacancy in the city.

The City of Atlanta MVA was conducted at the block group level, and although block groups in the same cluster (e.g., the C market cluster) are not all geographically close to one another, their conditions are similar. At the same time, conditions in each market are different from conditions in every other market (i.e., C market block groups are distinct from D market block groups, and so on). The MVA results can be explored in the map below. On the left is the legend with the MVA markets (A - I). Use your cursor to click on different areas of the map, and information on the conditions in that area will appear as a pop-up. You can zoom in or out and search for a specific place or address in the search bar at the top left of the screen (the magnifying glass icon). The areas in the lightest shade of gray are marked as "Insufficient Data" because they did not have enough sales (fewer than 5) to be included in the MVA.

The MVA can also be combined with other data to further understand Atlanta's housing market. Homebuying is an essential component of the housing market and the MVA shows the types of markets where potential homebuyers can afford to purchase a home in Atlanta. The map below illustrates where a household earning the city median income could afford to buy a home by multiplying that income ($77,665) by three and comparing that to the median home sale price in each block group, following the rule of thumb that people can afford to purchase a home worth about 3 times their annual household income.

The map below shows where households at this income level can and cannot afford to purchase a typical home. Households making the median income are mostly limited to the orange and yellow markets (G, H, and I), and a few F block groups.

Investor activity in the housing market is an area of increasing interest. Investors are defined here as buyers or sellers with an LLC, LLP, etc., or that own five or more parcels. Looking at home sales between 2022 to 2023 in the city of Atlanta, in the A though F markets, sales are predominantly between owners, with over half to three-quarters of homes being sold from one homeowner to another. However, in the F, G, and I clusters, there is higher investor activity, especially in sales from investors to investors (around a quarter to almost a third of sales). Home sales in H markets largely follow the city averages by transaction type. Owner to investor sales are most concentrated in I markets, while investor to owner sales are most prevalent in G markets.

Below are maps showing the share of home sales by type of buyer and seller. There are higher levels of home sales from owners to investors in the south and west of Atlanta. The maps showing sales from investors to owners and owners to investors are almost the complete opposite, with high shares of homes being sold from investors to owners from the center of the city to the west and south, while high shares of sales from owners to investors in the north and eastern parts of Atlanta. Investor to investor sales are occurring at higher rates in more central parts of the city and in the southeast.

For many homebuyers, the ability to access a mortgage is key to achieving homeownership. The table below shows mortgage outcomes from Home Mortgage Disclosure Act data by MVA cluster color (gray, purple, blue and orange/yellow). Across the city of Atlanta, origination rates range from almost two-thirds to three-quarters of loans being originated. The share of originated loans and applications per 100 households decreases from higher levels in the gray and purple markets to lower levels in the orange/yellow markets, but there is not a large difference, indicating that credit is sought in all parts of the city. There is a more notable difference in the share of estimated share of sales with a mortgage by color cluster. In gray and purple markets, the share of home sales estimated to have mortgages ranges from about 70% to 90%, while only half of home sales are estimated to have a mortgage in orange/yellow markets, meaning that around half of the homes bought in orange/yellow markets were cash transactions.

The Regional Atlanta MVA was conducted at the census tract level (a larger area than the census black groups analyzed within the city).

The table below shows the nine Regional Atlanta MVA clusters (as rows) and the conditions and characteristics that went into the cluster analysis (as columns). The bottom row is the regional average, so one can see how each cluster compares. The gray cluster (A) has the highest home sale prices in the region, elevated permitting levels, higher share of homeowners, and low levels of distress. Purple markets (B - C) also have high home sale prices, and B markets have the highest share of homeowners in the region and are predominately single-family homes. C markets have high levels of permitting activity and almost half of the units in these areas have been built since 2000. They are predominately renter occupied.

Blue clusters (D - F) have home prices right around the regional average. D markets have high amounts of permitting and building since 2000 and low levels of housing distress. E markets are primarily owner-occupied older homes, while F markets are predominately renter-occupied areas with little renter subsidy. The orange (G) cluster has the highest permitting levels in the region, high vacancy, and is predominately renter occupied and has a high share of households accessing subsidized rental housing. Yellow markets (H - I) have the lowest home sale prices in the region and H markets are mostly owner-occupied and have the lowest rate of permitting, while I markets have the highest share of renters and higher levels of subsidy.

The Regional Atlanta MVA can be explored in the map below. On the left is the legend with the MVA markets. Use your cursor to click on different areas of the map, and information on the conditions in that area will appear as a pop-up. You can zoom in or out and search for a specific place or address in the search bar at the top left of the screen (the magnifying glass icon). The areas in the lightest shade of gray are marked as "Insufficient Data" because they did not have enough sales (less than 5) to be included in the MVA.

The map below shows the Regional Atlanta MVA, with incorporated cities (outlined in dark blue).

The map below illustrates where a household earning the HUD-calculated Area Median Income (AMI) for Atlanta-Sandy Springs-Roswell could afford to buy a home by multiplying that income ($106,600) by three and comparing that to the median home sale price in each tract, following the rule of thumb that people can afford to purchase a home worth about 3 times their annual household income. Households making the median income can afford to purchase the typical home in some of the blue markets (D - F) and in the majority of orange and yellow markets (G - I).

Looking at home sales between 2022 to 2023 in the Atlanta region, in the gray and purple markets (A - C), 60% to almost 70% of sales are from homeowners to homeowners. In blue markets, especially D and F, there are higher rates of investors selling to owners. In the G, H, and I markets (orange and yellow markets), there is higher investor purchasing; a fifth of sales in I markets were from owners to investors () and almost a quarter of sales in G markets were from investors to investors.

Below are maps showing the share of home sales by type of buyer and seller. There are higher levels of sales from owners to investors in the south of the region (Fulton and Clayton counties), as well as in the east, in Gwinnett county. Sales from investors to owners are more spread out geographically, while sales from investors to investors are more concentrated in the southern part of the region, especially in the city of Atlanta. High shares of sales from owners to owners occur in the north of the region, starting in the city of Atlanta and extending north through Fulton county and parts of Cobb, Dekalb, and Gwinnett counties.

The table below shows mortgage outcomes from Home Mortgage Disclosure Act data by MVA cluster color (gray, purple, blue and orange/yellow). Across the Atlanta region markets, origination rates range from 62% - 71%, and the share of originated loans and applications per 100 households decreases from higher levels in the gray, purple, and blue markets to lower levels in the orange/yellow markets, but there is not a large difference in either of these measures, indicating that credit is in demand in all parts of the region at similar rates. As observed in the city, there is a more substantial difference in the share of estimated sales with a mortgage by color cluster. In gray and purple markets, the share of home sales estimated to have mortgages ranges from 70% to almost 80%, while only 56% of home sales are estimated to have a mortgage in orange/yellow markets, meaning that almost half of those sales were cash transactions.