Price reductions and inventory are at 5+ year lows in Atlanta, prices rise, signaling a seller's market, rising prices.

[Ben Bakhshi]

The real estate puddle is drying up in Atlanta. Rainbow days ahead.

Movoto.com's real estate trends report is showing that average price reductions have reached 5+ year lows (their data only goes back 5 years). A seller's market is upon us in Atlanta, and that means rising prices.

The truth of the matter is, it is getting hard to buy investment properties in the Atlanta area. Inventory is way down, nearly every home I've offered had multiple offers, and all the while ROI on new purchases is less than my older ones.

I have been buying for cash flow over the last 5 years. Honestly, factoring appreciation for very little. Give me a property that nets 20% and I dont care if the value never goes up, so long as there is rent to collect.

But high cash flow, decent area deals aren't around any longer. There are parts of Atlanta where you can still make exceptional returns, of course, and I would suggest anyone looking for out of the ballpark returns, with the risk that comes with very old buildings and very poor tenants.

Rising prices may squeeze rental investors on yearly rental ROI, but they are also the best sign that prices will continue rising in the future. Owning an appreciating asset which is also providing high yearly returns is what Real Estate is all about.

Movoto.com has a pretty great statistics graph engine. There are links below to some graphs. You can enter your city and state by changing the url.

They let you chart the average dollar amount of price reductions in a given city.

Around Atlanta, GA, average price reductions have dropped significantly from peaks during the last 5 years.

A corollary to this story is that list prices have been rising and the percentage of distressed sales have decreased steadily since January 2012.

Atlanta
March 2013 - $430
5-year peak: June 2010 - $1,632

Then some Atlanta suburbs:
Norcross
March 2013 - $19
5-year peak: June 2010 & January 2011 - $143

Roswell
March 2013 - $55
5-year peak: January 2012 - $240

Median list price chart for Atlantahttp://www.movoto.com/statistics/ga/atlanta.htm#city=&time=5Y&metric=Median%20List%20Price&type=0
Price reductions chart for Atlanta http://www.movoto.com/statistics/ga/atlanta.htm#city=&time=5Y&metric=Price%20Reductions&type=0