Why is everyone saying there's a shortage of inventory in Atlanta

Question

I've heard this from many realtors and wholesalers in Atlanta, that the shortage on inventory is real. They are saying that investors are having a hard time finding true deals and that even most wholesalers are pricing properties to high. Lenders are not lending based on the numbers and that the market is at it's peek. Now, I'm no guru whatsoever and don't know everything regarding my own market, but what's all this talk about??

I'm still getting deals that make sense and seeing lots of other deals out there that are ok. Numbers are getting tight I admit, but shortage? No, I don't see that. How about you guys????

Nick Fitzpatrick · Answer

@Carlito King There is a huge shortage of inventory here in Atlanta priced under $750k.

On the retail level we have seen a huge influx of buyers moving to Atlanta and nearly every owner-occupied sale is calling for highest and best offers. Why? Because we have more people moving to Atlanta than leaving. The hot neighborhoods often have lines out the doors once something decent comes on the market.

On the investment level we have seen a huge influx of buyers target the Atlanta market due to low (relative) prices and high (relative) returns. What was a good deal 18 months ago is now overpriced as sellers see what other properties are getting and want the same.

We're seeing a lot of stupid money enter the market and that's driving up prices to the point where dumps are going for more than turnkey properties just 18 months ago.

Yeah, there is a shortage across all fronts. From land to rehabs to buy and hold SFR to MF.

Mike H. Jones · Answer

Back in 2016 and even as recent as summer of 2017, I seen probably 1.5 more or perhaps even double the houses that are on the market now, especially in hot areas

Take all of 30314 and parts of 30318 for example, in 2016 there were lots of homes on the market being sold anywhere from the 60k-110k price points...duplexes, turnkey SFHs, 2 and 3 story homes,  SFHs with over 2k sq ft, just about everything...sure they needed work but the bones for most of the homes were decent and with maybe 15k-30k of work, you would have a home that could be priced in the 300ks in the next two or so years.

Now, I see maybe 1 or 2 of those in 30314 under the 180k price point that hit the market per month, and then those homes are fought over like sharks over sardines. Looking for a 3 BD 1.5 BA? Your job just got 10x harder. The difference has definitely been noteworthy, and I noticed it while it was happening without any site or study reporting it, so the reports essentially confirmed it for me. Its almost borderline ridiculous when you compare the availability and quality of homes on the market from 2015-2017 to today, some may even get frustrated. Similar stories for 30310, 30311 and parts of 30315. Fall 2017 hit, that was your last chance to find a bargain in anywhere within city limits and anywhere ITP for that matter. Once the new year hit, almost everything was being bought up.

Imo, the quality of most of these homes on the market now don't hold a candle to the ones being sold 2 and 3 years ago. And if they do, the seller has jacked the price up by another 80k or so. Most of the homes selling for bargain prices now are in the Adamsville/Bolton Rd areas or way down in 30315 near Dekalb county...the two most outermost corners of the city and of course, those homes are in terrible shape quality wise.

Not much of a super statistical analysis, but using the eye test, inventory is way down and the homes available are not really attractive (with or without renovations).

Daniel Humphries · Answer

As an agent and investor I can tell you the shortages are real. Most of my listings end up in a multiple offer situation. As for wholesalers, we are seeing more and more people try to enter the wholesale market with out being direct to the seller. They are not sending out mailers, just tacking their fee onto another wholesalers deal which is driving off market property prices up. It's tough to find deals that haven't been through 2 or even 3 wholesalers.

Gareth Jackson · Answer

@Carlito King I have heard this as well but here at my brokerage we are still finding deals all over. There is a whole lot of competition right now but still seems to be inventory as far as I can tell.

Carlito King · Answer

@Nick. Makes sense all around. When I market for sellers,  I am seeing high asking prices and almost always have to struggle to get them down to earth.  As for the land, I still am finding great deals all over.  Most of the great deals come from absentee owners , probate and older owners.

Tarik Abdullah · Answer

In my opinion, for what it's worth :) , If your main source for deals is the MLS than you are in for a tough time. By deals I mean being able to purchase and fix up the property for under 70% of the ARV. I am not going to criticize anyone on what they feel a deal is but by all means if they have a deal they would like to offer message me, I am always looking for a deal that I can purchase with hard money.

Kevin Auyong · Answer

You keep posting how great the market is on this and another thread. Can You give an example of a great deal since most others are having a hard time finding these?

Mike H. Jones · Answer

This article sums it up perfectly:

“Our latest inventory data tells us buyers are out in full force this spring,” said Javier Vivas, director of economic research for realtor.com. “Never in history have there been more eyes on fewer homes than today.”

The housing market has seen a 7 percent decrease in days on the market from last year to 63 days, and total listings decreased 8 percent year-over-year to 1.29 million. Buyers will face competitive conditions this season due to continuing inventory depletion carrying over in March housing trends.

While there has been a slow down at the rate that total listings are staying on the market, 36 of the largest 100 markets in the country are still seeing inventory move at least a week faster than this time last year, according to Vivas.

“March housing trends show the inventory depletion we’ve seen over the last two buying seasons is carrying over to this year,” he said. “It’s going to be a languid search for buyers this season as they face the harshest, most competitive buying conditions yet.”

Inventory between $200,000 and $350,000 remains low and it is nearly non-existent for homes under $200,000, while new listings above $300,000 remain healthy. Based on these current trends, one in 12 listings nationally will be listed above $1 million this summer, and one in three will be listed under the $200,000. Compared to in February where homes above $1,000,000 made up only one in every 40 home sales.

“At the end of March, we observed price gains that put us on pace for half of the homes listed this summer to be above $300,000,” Vivas said. “Buyers are not just paying more for the same home; the mix of homes in the market is rapidly changing.”

This is country-wide, but just imagine the rate it's happening at in Atlanta given the development, corporate success, announcements, cost of living, world class status, etc

https://atlantaagentmagazine.com/2018/04/11/home-p...

Why is everyone saying there's a shortage of inventory in Atlanta

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