Atlanta market slowing down?

Question

Decatur 30032 and Atlanta 30310 have been the two most active areas for flippers. However, I'm starting to see a lot of price decreases on listings. In 30032 there are 226 active listings (FMLS) and 179 in 30310. 25% have had price reductions in 30032 and 35% in 30310. Is the market slowing down are just getting back to normal?

Michaela G. · Answer

I think each neighborhood works independently from each other, depending on the different criteria that buyers choose. Yes, of course, there's inter-dependence , but East Point may be different than Pittsburgh than West End than Grove Park, due to developments in a particular area.

Julian Jackson · Answer

Market is changing.  In the 30310 and the 30311, where I do most of my work, the prices of good renovations are fairing quite fine.  It's the sub-par renovations, where the investors went into the situation like their S**T didn't stink is where you are seeing the price drops.  Sadly, everyone thinks their rehab is the best...  Lack of objectivity is what is causing the price drops.  Last 2 years had the investors shooting for the starts to the point that a dumpster fire would sell.  That time has past.  The price points are much higher, and people aren't willing to deal with that nonsense anymore.  Price point has changed and interest rates have changed, yet many investors are shoot for the stars...  Hence the price drops.

Kevin Polite · Answer

@Azeez K. Yes, I read that and that's why I started to do a little more research. I love reading the comments on Curbed.  The feedback can be brutal when they feature a home, but it's  really good research for City of Atlanta properties. Every blue moon they'll feature a DeKalb property.

@Amir Boneh Yeah, I've seen some poor jobs out there. Just because a neighborhood is hot, some investors say that house sold for X so mine should, when in reality they've not rehabbed to the same standard.

There is an article that I'm searching for that I read in either AJC.com or Curbed that showed that the most flipped zip codes in Atlanta were 30310, 30032 and 30311, in that order in 2018. I wonder if the market has just become saturated with too much inventory? Time will tell. One of mine sold in August in 7 days, but we put a ton into and the market started dropping right after Labor Day. Still houses are selling, so...

Kevin Polite · Answer

Prices on both ends are going up. I pulled MLS records on 30032 and prices are still increasing 4th qtr 2018 vs 2017 and even Dec 2018 vs. 2017. unfortunately I can pull out just East Lake, but that entire Decatur zip code is still doing well. Same with the westside 30130. Just less inventory. wholesale prices are higher because the retail value is higher as well. I see another good year.

Jeremy Masson · Answer

Metro Atlanta is in the middle of a huge market correction starting since last summer. The days of listing your renovated investment for an astronomical price are gone for the immediate future. Zip codes mentioned in prior posts are grossly oversaturated currently. Especially the East Lake/Decatur area. I would view homes in the west side and Decatur areas on a regular basis, but the the asking prices, amount of work needed and comps killed any potential deal. So I concentrate on other areas until metro Atlanta corrects itself.

Sellers/wholesalers/investors keep listing pre-rehabbed homes at 2017-2018 prices and it's too unrealistic in this market to make a profit. BUT investors (we) in the metro area keep buying 70 year old homes for $150K+, so they have to list the home higher to make a profit after rehab and other costs. And that high cost gets passed on to the buyer and buyer's have become wiser. Comps are not there anymore and renovated homes are sitting longer. The market is showing buyer's are not willing to purchase these renovated homes at prior year prices. Buyers can now be pickier, interest rates are higher and some areas not not gentrifying as fast as most thought which is keeping a lot of buyers away too.

Kevin Polite · Answer

@Michaela G. maybe a little of both as who would ever thing West End homes would easily sell for $300k+. Average DOM forever was 90 days so maybe the market is slowly reverting from super hot to normal.

Michaela G. · Answer

Is the market slowing down or are we used to looking at certain neighborhoods that have had major increases this past year and maybe buyers are starting to get priced out of those areas and are looking in lower priced areas now?

I have just bought 2 townhomes in East Point and they had bidding wars. I initially lost, but got both of them when initial contract fell through. I had offered 10k earnest money and was given 1st chance to then put contracts. Price points there are lower than the Pittsburgh neighborhood Id been working in.

How much is self fulfilling prophecy? It always slows down this time of the year. Then there are suddenly all of these articles about the market slowing down and buyers get scared about buying at the top and keep renting instead, which then further slows the market.

Lisa G. · Answer

I think the market is slowing down. I've lived in 30310 for over ten years and know my neighborhood very well. We all saw this coming. This year has definitely been the most activity but think it is leveling out, but not for long.

Brian Mcmenamin · Answer

@Kevin Polite Price changes are happening across the country. Listings are staying on the market longer than they used to. I think Atlanta will be alright especially if Amazon decides to put their second HQ there.

Amir Boneh · Answer

@Kevin Polite Thank you Kevin, I needed that :-)     ( I'm going to list 2 houses in 30032 in the next 2 weeks... )

Yes, I'm seeing a lot of price drops in 30032 but honestly I think some investors went overboard with the base price they paid for their homes and the amounts they are asking for the rehabbed houses. I guess people thought 30032 will be on fire forever. I'm looking at some of these houses being badly/cheaply rehabbed and think : really ? you're asking THAT much ?  $ 260k -$ 290k for a 3/2 1300 sqft 1950's house ? For that price you can buy 4/3 New Construction twice the size and not a long drive away.

Atlanta market slowing down?

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