Assessing values in Metro Atlanta's micro market

[Gordon Vaughn]

       When dealing with how to assess values, it's important to understand what type of market you're actively investing in. Some cities and metropolitan areas throughout the US are simple and easy to assess. Values in these markets can easily be determined by boundary lines, major streets/thoroughfares, or proximity to landmarks such as the downtown area or a bustling market area. These are called "macro markets". The values of homes located in macro market communities share similar and consistent values to one another based on broader area demographics and locations. 

Then you have the Metro Atlanta Market. A micro market just as complex as any other market in the US. In a micro market, area value determinations cannot be assigned or "blanketed" based on a large market area mass. You must micro-analyze Metro Atlanta markets based on smaller, more specific areas, and in most cases a half mile radius search to find values won't give you the accurate value determinations you're looking for. Most subdivisions in Metro Atlanta are conforming ones only to their respective subdivisions, which means you'll find a subdivision of contemporary homes built in the '70's selling in the mid 200's sitting right next to a subdivision of traditional homes in the $600's sitting right next to a distressed subdivision in the low $100's suffering from a 6-month 50% foreclosure rate, all with totally different rent rates. The Atlanta market requires much more research and diligence to evaluate. 

         When evaluating a home, start with looking at the 12-month sales activity and currently active listings only in the subject subdivision, and look at the listings that have been withdrawn or expired to find indicators as to why they didn't sell or were removed from listing. Look at the number of days the sales comps were on the market before going under contract & look at as many pictures and specs of those homes as possible to determine condition and amenity values. Look at the values over the last 4 months against months 4-12 to determine any value trends and pick up on as many indicators as you can that will help in narrowing and defining the home's true current market value. If there is at least 1 full market (fully renovated-move-in ready) sales comp in the subdivision within the past 6 months, this is all you need to accurately make a value determination. Perform your make, size, square footage, condition, and amenities adjustments compared to the subject home, then look at the sales values over the past 12-24 months to try to find past year's sales in order to gauge past-to-present values and market direction. Next, look at the past tax assessed values of those comps over the last 3 years and compare them to the TA values of the subject home, to try & identify your home's past marketability and desirability against the past values of your comps. After narrowing all the facts into a rough value estimate, you'll find that the number you reached is still far more accurate than if you performed a radius search. If you're flipping, you may have to go outside to a .5 or 1 mile radius to make sure there are supporting comps that will justify your asking price when a buyer's appraisal is performed, but by taking these steps you'll be able to pinpoint your value range by $0K-$15K in any circumstance whether your flipping, renting, or wholesaling.