The Drawcard that is Atlanta

Before investing in a flip property, you’ll want to be sure that there’s a demand for it once complete. Here, John Damiano, CEO/associate broker of The Providence Group, Keller Williams Realty in Atlanta, chats to YDL about what new Atlanta residents are looking for in a renovated home and neighbourhood.

Your questions answered

Question 1

YDL: Atlanta is one of the fastest-growing cities in the US. What type of homes are the following groups looking for:
1) college-educated young adults (singles, couples)
2) college-educated married couples with kids
3) empty nesters (close to retirement age, or already retired)

JD: The third group, empty nesters or baby boomers1, are selling up their big homes which require considerable upkeep and downscaling for increased simplicity. Single people want lock-up-and-go properties, while married couples want to move to the suburbs to live in close proximity to the best schools. It is important to understand the market that you are dealing with. A fourth group, property investors, are keen to either flip (buy-renovate-sell) or to secure passive growth and income.
Your Questions Answered…

Question 2

YDL: Atlanta is one of the fastest-growing cities in the US. What type of homes are the following groups looking for:
1) college-educated young adults (singles, couples)
2) college-educated married couples with kids
3) empty nesters (close to retirement age, or already retired)

JD: The third group, empty nesters or baby boomers1, are selling up their big homes which require considerable upkeep and down-scaling for increased simplicity. Single people want lock-up-and-go properties, while married couples want to move to the suburbs to live in close proximity to the best schools. It is important to understand the market that you are dealing with. A fourth group, property investors, are keen to either flip (buy-renovate-sell) or to secure passive growth and income.

Question 3

YDL: What are the main reasons real estate buyers (and even renters of homes) are giving for their move to Atlanta?

JD: Over the past two decades, Atlanta has grown to become one of the biggest cities in the world with one of the lowest costs of living. It’s airport is the busiest in the world, offering connections that allow travellers to get to just about anywhere in the US within four hours, and the clout of its big business hub has seen the likes of Mercedes move their head office in there. This translates into considerable high-level employment opportunities for college-educated people.

Question 4

YDL: In looking to buy/rent a renovated home, what special features are newbies to the city keen on?

JD: Millenials2 are keen on homes that are new and fresh, with all the bells and whistles. They are not like their parents’ (or even grandparents’) generation, which was up for carrying out renovations themselves. Granite kitchen tops, hardwood floors plus new technologies are popular with them. While they may enjoy a deck for entertaining friends over a barbecue, they also want their new home with its renovated kitchen and bathrooms to offer a lock-up-and-go lifestyle.

Millenials prefer to live in town, close to all the action. This allows them to walk to restaurants, pubs and the like. Ironically, seniors are looking for a similar lifestyle when they downgrade from their bigger houses in more remote neighbourhoods.

The middle group – younger married couples with school-going kids – are still keen on larger properties located in the suburbs, close to schools and community sporting facilities (country clubs, gyms, swimming pools, tennis courts, golf courses). These trends speak to the lifestyle choices of each group.

Question 5

YDL: What is the most popular ‘purchase price range’ that you deal with?

JD: Most homes priced between US$350 000 and US$550 000 sell quickly. There is not much inventory of properties under US$350 000, and anything under this price range that enters the market is snapped up even more rapidly. Inventory of properties is down 4.6% to 2.7 months of supply, as of June 2017, compared to June 2016. In fact, non-distressed resale properties priced below US$750 000 are in a seller’s market condition (see above). Quick decisions have to be made; the saying ‘You snooze, you lose’ says it all.

Question 6

YDL: One website on moving to Atlanta describes the city as follows: ‘Steady economic growth, a diverse culinary scene, tons of green space, thriving art culture and an exploding film industry – all with an affordable cost of living – make Georgia’s capital a great place to call home.’ Is this an accurate depiction? What realistic downsides can you name, if any? Perhaps competition to secure a home in a popular neighbourhood once it comes on the market?

JD: While Atlanta has the traffic of a big city like Boston or Washington DC, its infrastructure, unfortunately, has not kept up with the population explosion. So the perimeter highway, where the old train tracks of the city used to run, could use an upgrade to cater for the influx. To avoid having to travel through the current traffic volumes each day, several smaller business hubs have sprung up in and around Atlanta – these allow people to live and work in close proximity, avoiding the commute.

Another downside to consider is that if you put your house on the market, it is likely to be snapped up pronto and you could be left with no place to live if you’re still searching for your ideal home. To get around this, city dwellers have been buying off-plan within new developments and putting their homes on the market only when their chosen development is close to completion.

But, in the main, Atlanta has seen significant gentrification and incorporation of green spaces in recent years, with its metro offering better value and economic growth than the majority of US cities. While Atlanta was also affected by the economic downturn, it recovered fairly rapidly.

The latter sentiment is voiced on a range of real estate websites, which describe Atlanta as offering home values that have improved dramatically since the downturn, and possessing several indicators (sale-to-list price, price cuts and time-on-market) that show it to be a warm market that favours sellers over buyers.

In conclusion

John referred us to the Keller Williams’ ‘2Q 2017 Metro Market Report’, which explains that despite recent interest rate hikes by the Fed, mortgage interest rates in the US have not increased as much as had been expected and the accessible credit of recent times is thought to be assisting further to overcome potential market headwinds. However, those investing in the US property market need to re-evaluate market trends on a continuous basis so as to maximise selling price and minimise market time.

We work with experts like John to ensure we understand the Atlanta property market inside out, so that we can deliver the best possible solution for your investment. To find out more, email me at anton@ydl.co.za or call me on 011 465 7356.

Warm regards,

Contact YDL today to arrange a personal consultation, and discover how we can help you expand your investment horizons. Contact us

At a glance

It’s even more of a seller’s market now – for properties in the popular US$350 000 to US$550 000 price range – than it was at this time last year.
Days on Market (DOM) are 23, down by eight percent in 2Q 2017 when compared to 2Q 2016;
Supply is down by 4.6% to 2.7 months of supply in June 2017, when compared to June 2016; and
Sales prices have grown by 5.3% year-on-year (see below).

Glossary

1 A person born in the years following WW2, when there was a temporary marked increase in the birth rate.
2 A person reaching young adulthood in the early 21st century.

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