The World Economic Forum

Marietta Apartments: Atlanta Suburb Indicates Economic Health

The real estate market is a useful tool for predicting the economy’s health. Forecasters rely on the buying and selling of property as a way to gauge the strength of the economy and the confidence of the public. So it is no surprise that in today’s current economic climate, many experts are keeping an eye on the nation’s most vital commercial and residential markets.

The past decade was a prosperous time for Atlanta. Job growth soared, the population grew, and the real estate market brought home impressive numbers. Realtors, buyers and sellers enjoyed positive returns on their investments. This success trickled into the broader economy, and Atlanta benefited more than perhaps any other city in the country.

Then the economy faltered, spurred into decline by the nation’s subprime mortgage crisis. Atlanta, once the engine of America’s real estate market, now endured some of the most devastating setbacks. Like Icarus, Atlanta crept too close to the sun. Today it is struggling to regain its footing. It is trying to reboot its economy. It is looking towards the real estate market for signs of positive economic shifts. As of yet, it has not seen encouraging numbers.

Experts explain that in a downward economy, signs of public confidence often are seen first in real estate because people tend to buy or sell their homes when they feel financially comfortable. Jobs are a defining factor. If people are secure, and income is steady, only then does investing in a real estate move make sense. But these signs have not yet appeared, signaling that the economy, and Atlanta’s real estate market is still in a deep Recession. The Atlanta Journal Constitution recently ran an article that discussed the situation.

“If you take the historical data to interpret the current situation — and history is all you have — that would suggest that we are in a very deep recession that has yet to find a way to turn around,” said Economist Michael Reksulak of Georgia Southern University.

The consensus view among economists is that unemployment will worsen this year and level off in 2010. Predictions vary about housing, but in the 10 previous recessions since World War II, new home sales started to ebb before the economy overall turned down. But sales bottomed out and began to pick up a few months before the broader economy was in recovery.

So far, new home sales have shown no sign of a turnaround.

“We are already one year into recession and we haven’t seen that inflection point that would give us hope that we are coming toward the end of the recession,” Reksulak said.

It’s not that new home sales alone cause economic recovery and heated-up hiring. But real estate activity is one clue used by the National Bureau of Economic Research — the semi-official arbiter of recessions — in dating the start and end of recessions.

It is important to keep this news in mind. If you are considering a real estate investment, be certain that your financial future is secure. Then, if you have the capital and good credit to invest, today’s market is offering numerous attractive opportunities. Otherwise it is best to wait, to ride out the recession and focus on job security and financial stability. If you find yourself in this category, Atlanta and its surrounding suburbs, places like Marietta, have beautiful downtown areas and enticing apartments for rent.

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