Record Demand in Atlanta Largely Offset by High Supply

The Atlanta apartment market checks off many boxes that both investors and renters love. The market is the most populated MSA in the Southeast (about 6.2 million residents, according to the latest Census data) and offers a stable and well diversified economy. Atlanta is home to 16 Fortune 500 companies such as Home Depot, UPS, Delta Airlines and Coca-Cola. Total employment in the market hovered around 3.1 million at the end of 2024, with an annual growth rate of 0.9%.

These economic drivers translate to a need for a considerable amount of housing supply. Atlanta’s multifamily investment volume reflects that the market is a popular destination to deploy capital. Rewinding the clock back to 2014, Atlanta only trailed New York and Los Angeles for apartment sales volume. Today, the market remains relatively liquid with $4.5 billion worth of product exchanging hands and keeping Atlanta on the top 10 leaderboard, according to Real Capital Analytics.

Affordable housing is a big draw for renters as well. Monthly effective rents averaged $1,577 as of 4th quarter 2024, registering modestly below the national average ($1,831), according to data from RealPage Market Analytics. Across Atlanta’s 36 submarkets, rents surpassed $1,900 a month in the urban core neighborhoods of Midtown Atlanta and Buckhead. On the flip side, a number of submarkets posted monthly rents less than $1,250 as of 4th quarter 2024, including South Atlanta, Clayton County, South Fulton County and Stone Mountain.

In the 4th quarter 2024, Atlanta registered demand for 7,632 units, the highest 4th quarter reading since RealPage started tracking the market in 1993. Local apartment demand has increased 9 out of the last 10 quarters, with the 2024 reading totaling 24,580 units. That ranks Atlanta as the 5th highest in the nation, joining the likes of other Sun Belt demand heavy weights like Dallas, Houston, Austin and Phoenix. Seven of Atlanta’s submarkets posted remarkable demand in 2024, including Northeast Gwinnett County, Midtown Atlanta, Henry County, Far North Atlanta Suburbs, South Cobb County/Douglasville, South Fulton County and West Atlanta.

Supply volumes in 2024 largely matched demand figures, ranking Atlanta 5th in the nation for 2024 supply. Northeast Gwinnett County delivered the most product in 2024 with the addition of nearly 2,500 units. Looking ahead, developers are once again changing where to deploy additional capital with the Far North Atlanta Suburbs leading construction activity and accounting for 13.5% of metro-wide construction. West Atlanta and Henry County will also add significant new supply in 2025.

The consistently elevated development totals result in stiff competition and can lead to soft rent performance. Asking rents in Atlanta fells by 4.1% in 2024, ranking 47th out of the 50 largest markets nationwide. Every submarket, with the exception of West Marietta and Far South Atlanta Suburbs which only experienced minimal gains, realized rent declines over the past year. Rent cuts we’re most extreme in Sandy Springs and the Far East Atlanta Suburbs, declining nearly 7%.

Looking ahead, supply volumes are expected to fall by more than 25% from current levels by the end of 2025. Exceptional demand drivers will allow apartment performance to improve throughout the year. Annual effective asking rents are anticipated to turn positive by mid-year while occupancy improves modestly shows normal signs of seasonality.