Atlanta’s Housing Recovery Is a Tale of Two Cities

Atlanta home prices are up 14 percent over the last year. But minority suburbs remain underwater.

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Stephanie Stamm
Aug. 12, 2014, 5:21 a.m.

In the af­flu­ent sub­urb of Dun­woody, Ga., north­east of down­town At­lanta, the hous­ing mar­ket is re­cov­er­ing. Only 12.3 per­cent of homes in Dun­woody’s 30338 ZIP code are val­ued lower than the out­stand­ing mort­gage bal­ance. Home prices are rising. Just a short drive south is River­dale, a lower-in­come com­munity where 80 per­cent of the res­id­ents are Afric­an-Amer­ic­an. A whop­ping 76 per­cent of homes in River­dale’s 30296 ZIP code are un­der­wa­ter.

Since bot­tom­ing out in early 2012, At­lanta’s re­cov­ery has roughly tracked that of the na­tion as a whole. At­lanta’s home prices are up 14 per­cent over the past year, ac­cord­ing to Stand­ard & Poor’s Case-Shiller In­dices. (Case-Shiller’s 20-city in­dex is up 11 per­cent.) But be­hind that topline fig­ure are At­lanta area com­munit­ies such as Dun­woody, which has largely re­covered from the hous­ing crisis, and River­dale, which is still strug­gling, with no end in sight.

“[The in­crease] is due primar­ily to a dual hous­ing mar­ket, with more af­flu­ent com­munit­ies with­in the re­gion see­ing a strong re­bound, but with mod­er­ate-in­come areas see­ing con­tin­ued weak activ­ity and low val­ues,” says Dan Im­mer­gluck, pro­fess­or at the School of City and Re­gion­al Plan­ning at the Geor­gia In­sti­tute of Tech­no­logy. “It is really a tale of two mar­kets.”

River­dale is among those mod­er­ate-in­come areas, and one of more than a dozen At­lanta-area ZIP codes that lead the na­tion in per­cent­age of homes in neg­at­ive equity. A re­cent study from the Haas In­sti­tute for a Fair and In­clus­ive So­ci­ety at the Uni­versity of Cali­for­nia (Berke­ley), us­ing Zil­low data, shows that that 19 of the 30 ZIP codes with the highest per­cent­age of un­der­wa­ter homes are in metro At­lanta.

Why are so many of the most un­der­wa­ter ZIP codes in the At­lanta area? To an­swer that ques­tion, re­search­ers Taz George and Bing Bai of the Urb­an In­sti­tute’s Hous­ing Fin­ance Policy Cen­ter ana­lyzed Home Mort­gage Dis­clos­ure Act stat­ist­ics. They found that from 2001 to ‘05, At­lanta saw a 51 per­cent in­crease in new bor­row­ers, com­pared with 38 per­cent na­tion­wide. Then from 2005 to ‘12, At­lanta saw a 73 per­cent drop in new-pur­chase mort­gages, while the U.S. saw a 62 per­cent de­cline.

The af­ter­math of At­lanta’s acute boom and bust is still be­ing felt in the sub­urbs south of down­town, where census stat­ist­ics show that non­whites av­er­age 83 per­cent of the pop­u­la­tion in the 19 metro area ZIP codes that lead the na­tion in un­der­wa­ter homes. In con­trast, Dun­woody’s 30338 ZIP code is 24.1 per­cent non­white. At­lanta’s hous­ing re­cov­ery gap isn’t just geo­graph­ic or eco­nom­ic — it’s ra­cial and eth­nic as well.

COR­REC­TION: In an earli­er ver­sion of this story, the top map had the la­bels re­versed. Dun­woody is in north­east At­lanta, and River­dale is in south­ern At­lanta.


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