I think a lot of us know that the housing market has appreciated considerably across the country, which has affected the cost of living. With low inventory and high demand, prices have come up in most parts of the country. Places like Idaho have seen a whopping 39% increase in home values while single family homes in Atlanta have seen an increase by 23%. Relatively speaking, if compared to other parts of the country like the west coast and the Northeast, Atlanta is still more affordable. However, the irony is that families and individuals from those areas of the country and now moving to Atlanta in larger amounts, which have increased the demand in home ownership. Hence, the median and average homes values have come up since just a year ago.
First, let’s take a look at housing prices. According to realtor.com, the median sold home price is $375K. This accounts for both single family homes and townhouses and condos. More specifically, if we look at the numbers according to the Georgia Association of Realtors, the median sales price for single family homes is $389,500 while the median sales price for townhouses and condos is $290,000. These number better reflect the pricing in Atlanta than the average sales price since average sales price can be a bit skewed with just a handful of luxury homes that substantially affect the overall sales price. Since there are over 1,500 homes that have sold in 2021, the median home value is a more accurate number to follow.
HOA ranges from $300-$600. Each HOA covers different things that dictate the monthly HOA costs. For example, you might be surprised that one of the lowest HOA costs for new construction in the Midtown area runs for $178 a month. With this amount, HOA covers trash pickup, pest control, and high speed Internet. The catch is, some of the more comprehensive items like gated security, swimming pool, and utility coverage for items like water are NOT covered.
There are older one-bedroom condos that start out in the $160K to $170K range and there’s some new construction one-bedroom condos that are selling for as low as $270K to $325K. For cheaper 2-bedroom condos, you’re looking at around $250K and for more move-in ready, renovated 2 bedroom condos, you’re looking at around $390K. For townhomes, $410K is the selling price for 2 bedrooms, while 3 bedrooms sell for a median price of $460K. For single-family, a 3 or 4 bedroom will cost you between $500K to $600K, while anything 5 bedroom or bigger will cost you $700K to $3M.
Rental rates vary according to bedroom size. You can expect a one bedroom to rent out for about $1800 and a two bedroom to rent out for $2800.
But if you’re looking to BUY a home, this is where we need to break it down further. You’ve got your monthly mortgage that consists of four parts: Principal, Interest, Taxes, and Insurance. The principal and interest are related to the sales price and loan pay off respectively and taxes and insurance are the two parts to the mortgage that are variable in nature.
First, let’s speak generally about the taxes in Atlanta. The sales tax in Georgia is only 4%, but you also have to add up city and county taxes, which puts you at 8.9% in Atlanta. If you consider the entire metropolitan area of Atlanta, then you can start comparing other counties and their taxes. For example, Gwinnett County has a 2% tax rate, so the total sales tax of 6%. This creates opportunity for savings when making those big purchases. Can you imaging buying one of those nice HD 4K TV’s or an LG OLED or Samsung QLED? Or what about a nice Macbook or desktop? That’s some savings right there!
Now for income taxes, I spoke briefly about this in my Pros and Cons of Living in Atlanta video, which by the way, you have to check out after you finish watching this one. I mentioned that the income tax caps out at 5.75% if you earn over $7,000 annually, which means you can earn a significantly large income, and the state tax won’t go any higher than 5.75%. This adds extra motivation to get those promotions!
But the tax that we all want to know the most probably is property taxes since this is related to the monthly mortgage. So let’s dive into the numbers of what an actual mortgage would look like in Atlanta.
You can see here that on a condo priced at $350,000 with a 10% down payment ($35,000), your mortgage will be $315,000.
At a 3.5% interest rate on a 30-year fixed home loan, the total Principal and interest will be $1,414 a month, and home insurance of $29 a month. Unless you are doing a 20% down payment that removes premium mortgage insurance, you have to take this into account. Depending on the lender, you could get a lower PMI. I would say about $100 a month for this.
Last but not least, property taxes are about 3% of the tax assessed value of the property. What most people get confused is that they often think property tax is based off of the fair market value of the home. In other words, the value that the home is bought for by a qualified buyer. But, this is not the correct calculation. It is based on the tax assessed value, which is significantly lower and takes into consideration the property and the land the home is sitting on.
Currently, the millage rate in Atlanta is 30.97. You also have to factor in the millage rate of the county, which in this case is Fulton and it’s 9.54. So the total millage rate is 40.51. This translates to about 4% in property taxes in the city of Atlanta. So long story short, based on the tax assessed value, your property tax is around $500 a month. We could spend a lot of time covering the tax assessed value, but for the purposes of knowing what a monthly mortgage looks like, we can go with these numbers.
So your total monthly mortgage will be $2,043/month.
You might have noticed that the HOA fee of $300 was calculated in this example. Recall that all condos have HOA’s, and since there are a lot of mid-rises and high-rises in Atlanta, I wanted to make sure to give you the best representation of a mortgage based on condos since many buyers purchase them in Atlanta. Why don’t we take a look at a mortgage for a house!
Let’s use the same down payment of 10%, but this time on a sales price of $550,000 without HOA.
You would be looking at a total mortgage payment of $2,825 a month.
Your Principal and Interest would be $2,223 a month, mortgage insurance of about $150 a month, home insurance of $108 a month, property taxes of $344 a month. So you can see some of the costs being offset by having no HOA payments, but the single family homes are going to be higher priced than your typical condo.
Are you looking for more mortgage scenarios based on different price points? Or maybe, do you want to know how much it costs for a home in Atlanta based on renovations or square footage? Also, are you looking for a mortgage scenario based on a different county or city nearby? The Atlanta metro area is massive with a population of a little over 6 million people. Maybe you want to know a more specific area’s price like Sandy Springs or Johns Creek which also make up Fulton county. If any of these questions were in your mind, be sure to drop a question in the comment section down below, or reach me directly at 770-906-0748, or send me and e-mail, and I will be more than happy to help you out! Lastly, don’t forget to subscribe to my channel where I post more real estate info in the Atlanta area, and check out my Pros and Cons of Living in Atlanta video in the description. Talk to you soon!
