Clayton County’s tough home sales pose challenges for renters and house hunters

“I increased (the price) because inventory is low,” he said. “I was looking for another property similar to my house in the University Center area of ​​Atlanta for about the same price, but this property needed $40,000 to $50,000 in renovations.”

The challenges come as Clayton has struggled the most in metro Atlanta with the COVID-19 pandemic. Its unemployment rate at 7.9% is the highest in the region and it has a poverty rate of around 20%. The county has borne the brunt of economic downturns in recent years due to its high percentage of workers in retail, hospitality and other service industries, housing and economic development experts said.

This contrasts with the county’s pre-pandemic situation. Unemployment had fallen to 3.5% and there was a sense of new growth with revitalization efforts in downtown Jonesboro, a massive renovation of the county’s “Beach” water park with new walking paths and the opening of a popular Slutty Vegan restaurant.

To take a position

The purchase of more rental properties by investors has forced Clayton leaders to quickly find solutions to help tenants, who make up about 50% of the county’s population. Nationally, renters have struggled the most during the pandemic with just 75% paying full or partial rent as of Dec. 6, according to figures from the National Family Housing Council.

Earlier this month, the Clayton County Commission set aside $1 million in the Coronavirus Aid, Relief and Economic Security Act to try to prevent what members fear is an increase in the number of families without a roof over their heads if a national eviction moratorium is not extended past its December 31 end date.

201215-Forest Park-Nancy Henriquez and Devan Pinckney purchased their Forest Park home in August. Homes in the area are quickly bought up by investors who often pay cash, making it more difficult to purchase a personal residence. Ben Gray for the Atlanta Journal-Constitution

Credit: Ben Gray

Credit: Ben Gray

201215-Forest Park-Nancy Henriquez and Devan Pinckney purchased their Forest Park home in August. Homes in the area are quickly bought up by investors who often pay cash, making it more difficult to purchase a personal residence. Ben Gray for the Atlanta Journal-Constitution

Credit: Ben Gray

Credit: Ben Gray

The county’s school system also said Tuesday that it has asked its social workers to contact families who may be struggling to pay rent due to concerns that students facing housing instability could suffer financially. school.

“We want to reduce the number of children who will be thrown into homelessness,” said Angela Horrison-Collier, director of student services for Clayton County Schools.

Housing experts said the issue also reveals the uneven impact the pandemic-fueled economic downturn has had on Americans, especially those living in predominantly black communities like Clayton County.

Wall Street investors, real estate trusts and average residents who have been able to keep jobs where their income has not been affected by COVID-19 have been able to take advantage of historic low mortgage costs. Meanwhile, those in the areas where job losses are being felt the hardest are trying to hold on to what they have.

“COVID has hit some employment sectors harder than others, particularly retail and transport, as well as leisure, hospitality,” said Eugene James, chief investment officer at homebuilder Paran Homes based in Atlanta. “The airport is in Clayton County and travel has plummeted and is still suffering.”

Part of the problem, especially for black Americans, is the lack of generational wealth from which to invest in homeownership, said Vanessa Gail Perry, who recently authored the “2020 State of Home Ownership in Black America” ​​for the National Association of Real Estate Brokers. .

Black Americans often struggle with higher student loan debt, have lower savings and still face loan discrimination, she said. And home ownership, more than labor wages or savings, has traditionally helped create wealth through investment appreciation.

“Even when black people gain ownership, they don’t get the same values ​​for their property as their counterparts in white communities,” she said.

Rising home values

Clayton has seen its home values ​​climb steadily, said James of Paran Homes. The price of a new home in Clayton is around $228,000 – up from $216,000 at this time in 2019 – and new home values ​​have appreciated 6% in the third quarter of 2020 compared to the same period in 2019. Appreciation of existing homes in Clayton increased 10% during the period.

About 32% of Clayton homes were purchased with cash in July, August and September 2020, he said. By comparison, Forsyth County — the fastest growing county in the region — saw about 22% of its home purchases in cash, James said.

Homebuyer Pinckney bought his three-bedroom, one-and-a-half-bathroom home in Forest Park with its future value in mind. He said he believed gentrification was moving south from East Point towards Clayton and he wanted to be there before house prices skyrocketed.

“The next six to eight years will be an exciting time for property in Forest Park,” he said. “The return on investment for investors will only get better.”

Devin Williams, a mortgage originator for Regions Mortgage, said companies like his were trying to play a role in attracting more homeowners to Clayton. The bank has loan programs that provide cash to qualified buyers who are forgivable in an effort to gain more home ownership.

“It’s one of our biggest markets right now,” Williams said.

Clayton State University lecturers Russell Spears and Brian Hunt said Clayton has made great strides in housing over the past decade, but more needs to be done. In addition to battling its tenant numbers and addressing the prevalence of cash buyers, the county needs to have more housing diversity.

Part of the reason Clayton has been so attractive to investors is because builders decided the ideal home price was around $75,000 to $150,000 and added little inventory outside of that range. of price. Building more homes around $250,000 to $300,000 could start to open things up in the county.

This could mix with more diverse income levels and attract more landlords to flatten steady rent growth.

“There are people who have good paying jobs but live elsewhere because they can’t find what they want here,” Hunt said.

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