HOUSINGNEWS REPORT
SPOTLIGHT: ATLANTA
Ready for a Downturn Longtime Atlanta real estate investor Andy Heller knows why the institutional investors and other real estate investors have drastically curtailed their purchases in the region: the deals have dried up. “Today it’s very difficult to buy properties at the type of discount that I normally seek,” said Heller, who has been investing in the Atlanta market with his business partner, Scott Franks, for 25 years. Unlike some investors who might think it’s time to abandon Atlanta for other pastures such as Memphis, Tennessee, or perhaps Birmingham, Alabama, Heller is staying put with the properties he has. He’s just choosing not to buy more at this time.
lower-priced markets such as Memphis, where 51.2 percent of homebuyers were non-owner occupants in 2016, Cleveland (42.1 percent), and Birmingham (41.2 percent). Institutional investors purchasing at least 10 properties a year — many of them backed by Wall Street hedge funds and private equity firms — descended in droves upon Atlanta in the wake of the Great Recession, gobbling up discounted foreclosure properties by the thousands. These institutional investors collectively purchased more than 62,000 single family homes and condos in the Atlanta metro area between 2012 and 2014, accounting for more than one in every five home purchases (23 percent) during those three years, according to data from ATTOM. So far in 2017 institutional investors have accounted for just 4 percent of all home purchases in the Atlanta area.
… We think there’s going to be a down cycle in the near future and we’re kind of getting ready for that,” said Heller, who also coaches other real estate investors. “I tell my students at seminars today that we’re at the tail end of a significant upswing. This is the time you want to position yourself to invest. There will be an opportunity in the near future that will be great for investors.” From Sexy to Sustainable Heller’s observation that the housing market is on the upswing is certainly backed up by data. The August 2017 report from the S&P Corelogic Case- Shiller Home Price Index declares that the index reached an all-time high in June. The home price index for the Atlanta region rose 5.3 percent on an annual basis in June, according to Case-Shiller.
“I know there will be an opportunity around the corner and I’m ready for it.
THE RISE AND FALL OF INSTITUTIONAL INVESTORS IN ATLANTA INSTITUTIONAL INVESTOR PURCHASES PCT INSTITUTIONAL INVESTOR SALES
Today it’s very difficult to buy properties at the type of discount that I normally seek … We think there’s going to be a down cycle in the near future and we’re kind of getting ready for that.”
25.0%
25,000
20.0%
20,000
15.0%
15,000
10.0%
10,000
ANDY HELLER ATLANTA REAL ESTATE INVESTOR AND TRAINER
5.0%
5,000
0.0%
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
16
JULY 2017 | ATTOM DATA SOLUTIONS
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