Any thoughts on the effect of Super Bowl LIII on ITP market?

Question

Hey Atlanta Investors, I am new to BP but have been investing (rentals and few flips) in Atlanta since 2013. I did some research on previous Super Bowls and their effect on the real estate market of the host cities. It appears that real estate of hosting cities that have a lower price point (around 300k and lower) get a nice boost because of the Super Bowl. In Houston for example, many out of state buyers were paying cash for 100k to 200k condos, because it was apparently more cost effective than paying ridiculous amounts for a week's rental. Since inventory has reduced in southside and westside beltline neighborhoods and with all the developments going on, i feel like prices will continue going up at a faster than normal rate. Has anyone thought about or researched this? What are your thoughts about Atlanta real estate trends going into the Super Bowl and up to the end of 2019?

Rashida Sigmond · Answer

@Jeff Copeland completely random...I love your logo. I started singing the theme song :-)

Randy Lee · Answer

@Mike H. Jones I appreciate your analysis on all these zip codes. I don't know much about all the other zip codes you mentioned, my focus has been on 30310 and 30318.  Yes the southside beltline announcement has a great impact on Pittsburgh but also the Pittsburgh yards development. I think this will continue because at this point Pittsburgh is still more affordable than Adair Park, West End, Westview and even Mechanicsville.  Also, 30318 has already gone up quite a bit. I saw one analysis which said the price per sq ft in Grove Park has gone from $15 to $60 in the past 3 to 4 years, which is close to what i experienced on my holding in Grove Park. Like you suggested, i will keep my eye on South Atlanta, East Point and College Park as there seems to be opportunities there.

Mike H. Jones · Answer

I think that the current home prices in Pittsburgh are somewhat artificial due to the recent Beltline announcements and the proximity to downtown...I mean man, prices have literally shot up $130k on some streets in one year there. Kinda want to see what will happen to the area over the next few months. I have my eye on 30310 and 30314 more than anything, then I think the appreciation will start to spread to NW Atlanta (lower half of 30318) near the Westside Reservoir and along Donald Lee Hollowell, the rest of 30315 near Historic South Atlanta and Lakewood, and then ultimately down to 30311.

I think East Point, Hapeville, and Historic College Park will appreciate shortly after as well due to prices already being pretty a bit more hefty in the other areas ITP; the luxury of getting to downtown/midtown within 20 or so minutes and not having to hop onto the interstate will make these areas attractive. I think the rumblings of the Aerotropolis will help these areas as well. I have my eyes on what happens on the Northside and Eastsides of Atlanta as well, especially in 30340 and the lower half of 30316 in Dekalb County.

A dark horse is the lower half of 30315 below Lakewood ave and next to South Dekalb county...I wouldn't say there's a lot of blight, but there is a lot of abandoned homes. Would like to see what happens with this area.

Jeff Copeland · Answer

This is an interesting academic question. But I think that's about all it is.

Real estate markets are slow to respond to any stimulus, so how could a one time sporting event having any significant long term impact on a real estate market?

We've hosted numerous Super Bowl's in Tampa, and I've never even heard this come up, let alone see any data to support it.

Of course, you'd expect a short term uptick in AirBNB, vacation rentals, and hotel occupancy and prices. But it's not like this is the only capacity event these Cities host. The host cities generally treat Super Bowls like any capacity event, and they host dozens (from NFL games, to monster truck rallies, to concerts) throughout the year, so the Super Bowl is just one more game in an already busy stadium schedule for the host cities.

Randy Lee · Answer

Thank you @Mike H. Jones. These are my thoughts as well. I've been tracking Pittsburgh for example and i am amazed to see what's happening just in the past few months. The nicely renovated homes that are around 200k and some even over are flying off the shelf. Inventory in general is way down in the area. Imagine what would happen by Super Bowl next year.

Jarrett King · Answer

I think it will be hard to judge if it's the SB or the fundamentals of Atlanta. For example, New Orleans was one of the examples but that city isn't and wasn't anywhere near the city Atlanta currently is so the SB could be pointed to as a factor that "spurred" growth. Like Jeff said, Atlanta is already big enough and hosts enough major events that the SB is just another added to the list more than anything.

Mike H. Jones · Answer

I would like to imagine that the Super Bowl attracts buyers to Atlanta at a higher rate than many of the previous cities did. I don't think many of the previous cities had the "steam" that Atlanta currently has. In addition, the perfect storm of great/non-hazardous weather, the already strong economic base, the education base, all of the new developments and companies moving here, the new MLS team, the streetcars, the COL, etc. is enough to attract a significant portion of homebuyers who didn't even have intentions to move in the first place.

Now of course, it isn't easy as "I went to the Super Bowl in Atlanta and I loved the city, lets move!" But even with a 50k increase in prices from now until February 2019, prospective buyers, especially from the West Coast and Northeast, will still be laughing at some of the prices ITP.

I predict that it will be hard to find a 3BD 1.5BA property under 200k ITP a year or so after the Super Bowl.

This is 100% speculation from my brain of course, but this is an interesting topic nonetheless.

Randy Lee · Answer

I understand...that's why i wondered if there'd be an impact in parts of Atlanta, considering prices are increasing anyway. I'm not looking to invest solely based on the event, just planning for my existing holdings.

Jeff Copeland · Answer

The article itself pretty much says the data is hit or miss:

Experts debate the impact. “There’s no doubt you can rent your apartment for a nice chunk of change for one weekend [for the Super Bowl]," says Victor Matheson, a professor at the College of the Holy Cross in Worcester, MA, who studies the economic impact of sporting events. "But is that enough to move real estate prices?”

...the longer-term impact varied widely, favoring lower-tier places like New Orleans and Glendale, AZ, which have attractive markets for second (or third) homes.

Randy Lee · Answer

@Jeff Copeland Thanks for your response. I wasn't quite clear or sure of the effect either but check out this article from realtor.com. I found it pretty intriguing https://www.realtor.com/news/trends/super-bowl-homes/

Any thoughts on the effect of Super Bowl LIII on ITP market?

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