Property Cycle - Atlanta GA

[Marisa R.]

Be interested on where investors think Atlanta is at the moment, in terms of the cyl

[Canesha Edwards]

@Marisa R.

My opinion is everything is over priced and here’s why. While there are so many people moving to Atlanta, a lot of that was because of the city’s affordability and economic opportunities. However, the only construction going on in the city in luxury, high rise, etc. The percentage of people that can afford these price point isn’t very large. Atlanta is becoming less affordable which is why many people choose to come here in the first place. Secondly, on the commercial side, I’ve toured mid size apartments listed at a 5-6% cap that were half vacant and needed a total gut. So, this let’s me know there is a lot of speculation in the market.

Also, “The Beltline” isn’t bringing the price appreciation that was expected. The initial endeavor made an impact of the appreciation along future development paths hasn’t lived up to expectations. Thirdly, I recently read an article here on BP that was about the foreclosure rates in GA. Most of the major counties in GA, Fulton being in the top, have seen a spike in the year over year foreclosure rates. These weren’t small spikes either. Im talking large percentages here.

There are also other things at play. Student loan debt is becoming a problem. We could start seeing auto loans becoming a problem as well.

It honestly feels like we’re in 2005-2006. There a small signs of trouble but the party is too good currently to show concern. So, the market will probably continue on maybe another good year and a half before we start to see major signs. BUT things are still over priced in Atlanta.

Now, if a great deal comes my way, I won't pass it up, but I like to invest in Real Estate how Warren Buffet invest in businesses. And he doesn't follow the trend. Atlanta is trendy to invest at the moment. Why? Because during the last recession the city was one of the worst impacted and things were cheap for so long. This next recession, whenever it comes....we will see a lot of MFR owners in trouble either because they over paid, over rehabbed, and over speculated, and there will not be enough cushion to offset the declining rents.

Again just my opinion from what I’m seeing here in Atlanta on a daily basis.

Happy Investing!

Canesha