Last Thursday in the state of Georgia Department of Labor announced the Georgia unemployment levels have quickly risen to a state wide unemployment figure of 8.6%.  What is really bad is that this recent trend has occurred rather quickly.  In December of 2008 Georgia's unemployment was at 8.1%.  As of this week there are almost 413,000 unemployed and looking for work.  These are the highest levels of unemployment in Georgia since 1976.  Current unemployment levels are 60% higher than the same time last year!  Scary stuff.  The problem is the unemployment rates are expected to go higher.  So how does this impact Atlanta real estate? 

Fist of all unemployment reduced the pool of prospective home buyers.  The 'unemployed' do not look to buy homes.  The buyer pool contracts.  Not just by the 8.6% that are currently employed, but their co-workers.  Related industries cut back.  Self employed businesses suffer, restaurants, diners, and fast food establishments.  People that are still working wonder if they are next to lose their job.  They begin to watch how they spend their money, they save more and are cautious about making impulsive decisions.  Perhaps their hours are cut or benefits by their companies that are trying to right size and survive.

When they buy a home or purchase Atlanta real estate their goal is to buy right.  They are concerned about owning Atlanta real estate they cannot afford and they want to make sure they can carry the payment of the new property if they should lose their jobs.  Perhaps they will look at Atlanta real estate and not buy.  Then again they make only one offer on a property.  It will be a very low offer.  If the offer is accepted they will buy, but if the offer is countered they will view it as a 'sign' to move on.   This behavior translates into a lot less home sales, an a lot of high anxiety for all.

High unemployment robs consumers of confidence.  It translates into less sales, and lower prices by desperate home sellers.  High unemployment will continue to hurt Atlanta real estate that has not yet bottomed, and it is expected to worsen before it turns around.