NUTS & BOLTS MARKET ANALYSIS
STRATEGIES: REITs UPDATE: ATLANTA
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Market Update: Atlanta, Georgia THE “EMPIRE STATE OF THE SOUTH” IS STILL BUILDING STRONG.
area housing prices are still heading upward. However, available inventory is heading downward, with only about 2 ½months’ worth of homes for sale in June 2017. Con- ventional wisdom says five to six months’ of inventory is a healthy, balanced market. Re/Max vice president John Rainey observed that the low inventory numbers will “continue to strain the greater Atlanta real estate market” if something does not change. He warned that the supply-and-de- mand “mismatch” will affect surrounding areas like Fulton and Dekalb counties, where median sales prices have skyrocketed in recent years. Fulton home prices were $400,000 in June, while Clayton County, a longstanding leader on ATTOMData’s “Top Rental Returns” lists, still retains the least expensive homes in the area with median prices of $130,000. Investors should note that Clayton price tag is more than double median price in the area just three years ago. As often happens in markets that lack affordable housing accessible to first- time buyers, the Atlanta market is in danger of stalling because homeowners with the means to “move up” from their starter homes find themselves unwill- ing to sell for what the area’s first-time buyers can afford. Instead, they remain in place, thereby creating a blockage in the system starting at the very bottom. Unless a new, more accessible inventory
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by Carole VanSickle Ellis
L
ast October, Think Realty Magazine featured Atlanta,
the widely pervasive affordable housing crisis that is spreading eastward from the west coast. Atlanta’s ability to provide affordable housing to a growing pop- ulation will play a key role in the city’s housing market growth in 2018. Any type of housing crisis is enough to give a savvy investor pause. However, with rapidly expanding industries like film and luxury automotive taking root in the area along with existing behemoths of employ- ment like Delta Airlines remaining firmly entrenched, Atlanta still has a great deal to offer investors across the spectrum.
Georgia, in a market analysis. At that time, we observed that the southern city represented opportunity not just to traditional real estate investors inter- ested in building real estate portfolios but also to private lenders. Individuals and companies facilitating short-term, hard-money loans were already flocking to the area in Fall 2016 thanks to the city’s “dynamic community of real estate investors, a proliferation of great collat- eral (read: deals) with attractive profit margins, and the burgeoning demand for housing in the metro area,” we said. One year later, Atlanta home prices are higher than ever, but even one of the most affordable major metro areas in the country is starting to suffer from
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RISING PRICES, BUT LIMITED INVENTORY
According to the Atlanta Realtors Associ- ation (ARA) and Re/Max Georgia, Atlanta
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34 | think realty magazine :: october 2017
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