MARKET & TRENDS
Nashville, TN
SOUTHEAST SPOTLIGHT
airport, Hartsfield-Jackson Interna- tional Airport. It’s also the head- quarters of 26 companies on either the Fortune 500 or Fortune 1000 lists, and has an unemployment rate of 3.3 percent as of May 2019. For real estate entrepreneur Ken Corsini, those are all good reasons why Atlanta has been a great loca- tion to grow his business as CEO of RED BaRN HOMES. Corsini, who along with his wife Anita, star in the HGTV show Flip or Flop Atlanta, have seen their enter- prise 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
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 per- cent quarterly increase and up 38 percent from the same quarter last year but 75 percent below the metro’s peak for flips in the second quarter of 2006.
market, so business is still strong for our agents.” “As a real estate investor, espe- cially in the markets we’re investing in — the transitional neighborhoods we flip houses in — what’s hap- pened 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 uncertainty in the mar- ket 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 activ- ity. 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.”
ATLANTA-SANDY SPRINGS-ROSWELL, GA MSA HISTORICAL PERCENT OF HOME FLIPS
Spotlight on the Southeast: Atlanta and Nashville
16.0%
INVESTMENT POTENTIAL STILL EXISTS DESPITE CHANGING TRENDS.
12.0%
by Joel Cone
L
ike many parts of the country, metro areas throughout the Southeast have prospered in terms of key economic indicators and real estate market trends since the end of the Great Recession. All are positive signs for continued invest- ment in real estate; although, some changes are occurring. “The Southeast is strong. The cost of living is very attractive compared to other parts of the country,” said Gregg Logan, Managing Director
of RCLCO Real Estate Advisors. “If you look where the greatest growth potential continues to be, it’s the Southeast in terms of population and job growth, relative affordability and builder sentiment. The cost of living is very attractive compared to out West and the Northeast.” Still, the winds of change are in the air. As a result, some veteran investors with significant track records in the business are starting to hedge their bets, modifying their
business strategies somewhat to align more closely with what they see as a potential downturn in what might otherwise still be a relatively healthy marketplace.
8.0%
4.0%
ATLANTA: A TIME FOR CAUTION?
It has the fourth fastest-growing population in the nation, according to the US Census Bureau and it’s the home to the world’s busiest
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
92 | think realty magazine :: september / october 2019
thinkrealty . com | 93
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