Real Estate Investing Market Trends – Mid Year Report

The investing market is heating up all over the nation and Atlanta is no different.  We are seeing a lot of trends that we want to share with you and provide you with some insight into the Atlanta Real Estate Market.

Banked Owned Properties also known as REO’s (Real Estate Owned) are pricing properties very low and as a result bring about multiple offers for those really good deals. It is like a reverse auction. One deal we recently bid on had 16 offers for the home.  So the one with the highest & best offer wins.

Investors’ highest competition right now is first time home buyers. While investors need to make a profit an owner occupied is only looking for a good deal on a home to live in. So properties that are in good condition that are reasonably priced are being sold to owner occupied first time home buyers.

We have all heard about the shadow inventory and no one knows for sure just how much that represents. We were speaking with a foreclosing attorney last week that is estimating that the foreclosures in Georgia will be increased to approximately 8,000to 10,000 per month by 4th quarter 2012. This will provide a huge increase in inventory in the 1st Quarter of 2013.

Large Investment Fund Managers from outside Atlanta are purchasing homes at the courthouse steps in bulk and placing them with local property managers for a 5 year term to rent until the market returns. This will impact the future market as well as the rental rates as more rental supply becomes available. This is one of our larger concerns as they will all be competing not only for investment inventory, but also for rentals. We are also seeing where these Fund Managers are overpaying for properties which mean that property values, while increasing, make it harder for the individual investor to compete.

While we are seeing increases in rental rates with a lot of our properties, we are seeing that older homes are still lagging on the market.  Houses need to be in excellent condition or they will not rent quickly. Even if the home is priced aggressively, because of the available options for rental that they see on-line, the homes are not renting quickly. Renter evaluate homes on-line, compare prices, and make most of their decisions about renting 80% of the time before they even view the home in person. It is so important to have an excellent on-line presence for renting homes in today’s market.

More real estate agents are showing rentals. This has been a huge shift in the role of the market place. It used to be rarely would an agent show a rental property – now approximately 40% of our homes that are leased are shown by a real estate agent. Having options to make it easy for agents to show property has been a large part of our success in the marketplace.

Atlanta Housing Source & Solid Source Property Management help our clients understand the market trends and what it means for them. Whether they are a traditional buyer/ seller or an investor – we can guide you through the best strategy to maximize your return.

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