MARKET SPOTLIGHT: The Southeast
Corsini, who along with his wife Anita, star in the HGTV show Flip or Flop Atlanta , have seen their en- terprise expand well beyond investing and new home construction into a retail brokerage business. “I’ve actually got two different lenses from which to look at the market right now – the broker lens and the investor lens,” said Corsini. “Prices are up five percent in metro Atlanta so it’s a strong economy and a strong market. Inventory is also up 14 percent in the detached market so business is still strong for our agents. “As a real estate investor, especially in the markets we’re investing in – the transitional neighborhoods we flip houses in – what’s happened in those neighborhoods is we’re seeing way more inventory than even a year ago. There’s less absorption going on. As investors, we’re in the habit of getting in and out of a market as fast as possible.” As a result, Corsini believes there is a level of uncer- tainty in the market that has him concerned, as well as feeling cautious, for at least the short term. “Investors in the state are a little cautious. Even us.
We’ve really slowed down our investment activity. We’re mostly doing wholesaling right now. We’re waiting to see what happens with this economy. Maybe consum- ers are being a little more cautious as well.” With hedge funds still plucking the best properties they can find in the marketplace, Corsini said he has decided to stay on the sidelines for the most part in terms of both buy and hold and flipping at least for the remainder of this year. “We’re doing very little flipping and not much buy and hold right now. We’re a little risk adverse. When you have a gut feeling that things have been good for a while and inventory is increasing, you don’t want to be the guy holding the bag when the market turns.” For the first quarter of 2019, ATTOM Data Solutions reported that flipped homes accounted for 9.6 percent of total home sales in the Atlanta metro area, a 28 percent quarterly increase and up 38 percent from the same quarter last year but 75 percent below the met- ro’s peak for flips in the second quarter of 2006.
Investors in the state are a little cautious. Even us. We’ve really slowed down our investment activity. We’re mostly doing wholesaling right now. We’re waiting to see what happens with this economy. Maybe consumers are being a little more cautious as well.
KEN CORSINI
When it comes to flipped homes, ATTOM reported a purchase price of $147,100 and a sales price of $194,000 during the quarter, a 31.9 percent gross return on in- vestment. The average flip took 154 days to complete. Still, Corsini sees Atlanta as a strong and steady market and a good place to be investing in real estate and to run a real estate brokerage. And it’s a metro area that is attracting strong demand from buyers. “I think Atlanta is one of the main markets for ibuy- ers. There must be confidence that Atlanta is a strong market or they wouldn’t be buying here. They’re going to continue to take market share.” Foreclosures in the area have declined precipitously over time. For 2018, ATTOM reported 11,831 proper- ties with foreclosure filings, a downward spiral from the metro’s peak of 95,145 properties with foreclosure filings reported for 2010. In all 2,828 properties with foreclosure filings were reported in the Atlanta metro area for the first quarter of 2019, a 25.50 decline from the same quarter a year ago. The metro area ranked one in every 87 housing units with a foreclosure filing for the quarter.Likewise, distressed sales, which investors at one time count- ed on for discounted deals, now only account for 17.6 percent of all home sales in the metro area for the quarter, down two percent from a year ago. There was no change reported for third party foreclosure auction sales at 1.8 percent, while short sales were up slightly and REO sales declined during the period. Homes in the metro area sold for a median price of $201,300 during the first quarter, a 4.8 percent year over year increase, and 121 percent above the post-re-
Atlanta, GA
ATLANTA-SANDY SPRINGS-ROSWELL, GA MSA HISTORICAL PERCENT OF HOME FLIPS
cession bottom price of $91,000 reported for the first quarter of 2012. “From a high-level perspective, if you look at what drives real estate demand and makes assets attractive in a market like Atlanta, I would say it continues to be a strong market. It has some fairly desirable stats like good weather and the fact that prices and rents have risen quite a bit since 2010,” Logan said. Rent for a three-bedroom home in Atlanta is $1,522 so far in 2019, up 6.3 percent from the year before, according to ATTOM. For residential investors, Logan noted that the good news is growth in rental income has been “off the charts” as he put it. Yet he’s not sure how sustain- able that growth will be. As for flipping, he sees good opportunities remaining in the market; although, home prices are growing at a slower pace than a year ago. In the meantime, for Corsini, when he does make purchases to flip or buy and hold, he buys them off-market, utilizing direct marketing to locate deals. For the most part though, he is wholesaling a lot of homes to other investors. “We’ve been on this run for a long time. Nobody wants a repeat of ’07 and ’08. As an investor I want to buy at the bottom not the top. I’m biding my time to see how things play out,” he said.
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0.0% Q1 2005 Q4 2005 Q3 2006 Q2 2007 Q1 2008 Q4 2008 Q3 2009 Q2 2010 Q1 2011 Q4 2011 Q3 2012 Q2 2013 Q1 2014 Q4 2014 Q3 2015 Q2 2016 Q1 2017 Q4 2017 Q3 2018
20 think realty housing news report
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