In the Atlanta Real Estate Market, 2012 has been a series of ups & downs.
We can break down the buyers into 3 different categories – First Time Home Buyers, Investor Buyers, & Move Up Buyers.
First Time Home Buyers
The purchases of investment properties by large hedge funds for rental service has created a tighter real estate market, pushing out many of the first time home buyers. We have gone from plenty of appropriately priced homes for entry buyers, to very limited inventory. We are seeing multiple offers and bidding wars on properties that are in good condition with little repairs. This is driving the prices in the low end, less than $125,000 up at a faster pace than the balance of the market.
We are seeing investors flood into the Atlanta Market (and others across the nation). This is creating an upward pressure on the lower tier market. However, there are still plenty of deals out there than the big buyers can’t or won’t buy. The key for investor buyers to be successful in today’s market is to hunt where they are not. So there are opportunities in larger rehabs, unlisted properties, & short sales. The hedge funds have little patience with finding these types of properties making them the best strategy for investor buyers looking to purchase. It is still fairly risky to flip in this market, but we are did see some movement in this area versus years past where there was nothing but a downward spiral.
Move Up Buyers
Now is the time to get those great deals! For sellers in the $300,000 – $800,000, there is little inventory and there are those who are looking to take advantage of the last great deals. If you can sell your home competitively and make a purchase on a move up home, you can significantly improve your equity position. We feel that move up buyers will have about a 12 month window before that market gets tight as well. So if you have considered a move – get into the game if you can.
So What about Traditional Sellers?
There have not been to many traditional market sellers in 2012. The larger part of the sales have been foreclosures & short sales. 30% of all our transactions this year were listings. Of those listings, 50% were short sales or banked owned sales. We are at the lowest level of listings in many years and yet, it is the best time to sell your house if you can price it well and have it in good condition. We expect this to continue into 2013.
We are still seeing a relatively flat rental market. There have been slight pockets of rental rate climbs, but with all the investors purchasing rentals, the market is still fairly flat. Investors whose point of entry into the market is so much less than what it was 5-7 years ago can afford very competitive rental rates which is what is keeping rates flat. Newer homes with 4 bedroom or more in communities with amenities are in higher demand as this is not the traditional market being purchased by larger institutions.
Looking forward in 2013. We expect to see a hot spring with a lot of pent up demand. Builders are gearing back up cautiously, but we are seeing more and more new construction which is a great sign. While we don’t expect it to be an over the top kind of year, we are optimistic that prices will climb steady.