Between Covid and all the accompanying supply problems and government spending reaching levels never before seen, inflation has been in the news a lot lately. A new study from financial advice platform Smart Asset has broken inflation down by metro area and the Atlanta area had the unfortunate arrival in the top spot for all 23 metro areas for which Bureau of Labor Statistics data is available.
Granted, the Atlanta area only edges out Tampa by .1 percent but the 12-month change in the Consumer Price Index (CPI) for Atlanta was 6.7 percent. Nation-wide, the figure was 5.4 percent, and nine metro areas including Atlanta saw higher increases. There are a number of factors at work in boosting the area’s inflation, including gas prices jumping more than 59 percent over the last 12 months. Covid-related supply chain problems also helped to spike prices of goods and services.
Home prices are not included in the CPI but housing costs are in somewhat of a convoluted formula involving something called “Owners’ equivalent rent of primary residence” and “Rent of primary residence.” A slew of other goods and services are included in the CPI basket, including food and beverages, clothes, transportation, medical care and recreation.
Besides Atlanta and Tampa, Riverside, Minneapolis – and perhaps surprisingly – Anchorage rounds out the top 5. Apparently, BLS data has not yet caught up to the trendy Charlotte as worthy of regular measurement. Atlanta is the only Southern city measured, excepting Houston and Texas which could be considered a separate region.
Interestingly, high cost of living areas came out on the low end of the CPI scale. The San Francisco area was the lowest among all areas measured, with Denver, New York, Los Angeles and Boston rounding out the bottom five.
From an economics standpoint, this makes sense as the price pressure in the high cost of living areas is already at a very high level. In lower priced areas, there is still room for the market to push prices up.
SmartAsset advises a number of ways to hedge against inflation, including investment – it is after all a platform for financial advisors as well.
Regarding those home prices that are not included in the CPI, Atlanta home prices have seen a strong growth over the past year and decade. They increased by 10.6 percent over the last year and are projected to grow at roughly the same over the next year. Over the last five years, they have increased by 49 percent. The median price of a single-family in Atlanta is now a whopping $395,000 based on recent reports from Realtor.com. The most expensive neighborhood in Atlanta is now the Morningside-Lenox Park area where the median listing is $900,000.
For those looking to move to the Atlanta area as a lower cost option, unless they are looking to move from one of the higher cost of living areas, those lower costs may not be around a whole lot longer.
