Atlanta Multi-Family November Update

Atlanta Small Multi-Family November Update

You are receiving this update as we have discussed multi-family properties in the Atlanta market. Historically, I’ve sent communication out to landlords with market updates – but not buyers! I’m changing that so that you can stay as up to date as possible!

Overview:

The overall market has remained very steady all year with extremely low inventory. This is a key focal point for me as it tells us that owners are confident in their properties and have high confidence for the future.

Market Factors I’m Watching:

• * The share of conforming loans in forbearance have dropped for 19 straight weeks and currently sits at 3.77% according to MBA and is at 5.6% of all loans (includes non-conforming, more risky loans) according to Black Knight. Both companies have closely watched this number as it speaks to the overall health of the mortgage market. Any potential defaults within the group will easily be absorbed by the huge buyer demand.
• *Interest rates have fluctuated on a weekly basis but remain historically low. Expect volatility – legislation such as a stimulus package will push bonds higher but overall rates will remain low until the scare of the pandemic is over.
• *Low interest rates help multi-family buyers, giving more purchasing power – but there is also a downside to that. Landlords I speak with have seen well qualified tenants move out at the end of a lease and purchase a home because of the same purchasing power!
• *This leads us to vacancies. Vacancies have been very specific to property location, marketing and price point. Apartments attracting millennials are seeing higher vacancies as they shift to homeownership. It is more important than over to qualify your potential tenants.
• *Rent collection in October 2020 mirrored rent collection in 2019 according NREI and came in around 95%.
• *Counties in Metro Atlanta are accepting writs of dispossession (eviction filings). The enforcement is delayed by about 30 days due to the backlog from the spring and summer.
• *Atlanta is listed as a top destination for people moving. 26% of searches for homes in Atlanta on the Redfin app came outside from Metro Atlanta. While those are single family homes and we’re talking about multi-family properties, the trend is continued migration to Metro Atlanta.

Winning Strategies:

Fundamentals matter. Ignoring the noise and executing on your personal strategy is still the key to succeeding. Just don’t get stuck. Sometimes we have to adjust and I’m always open to discuss different strategies.

Value-Add Tips:

COVID-19 has increased e-commerce shopping. We are suggesting landlords create a new amenity in the small apartment space: secure drop locations for package deliveries. Creating a safe landing spot for your tenant’s packages is a new amenity tenants will desire.

Property owners should invest in high quality digital photos, virtual tours and even 3D tours as tenants will expect these going forward.

In the Media:

I was given the opportunity to appear on a Podcast for the REI website, BiggerPockets. Here is my interview regarding a deal I did earlier this year. For this deal, we filmed the entire process of buying property sight unseen, out of state.

https://www.youtube.com/watch?v=jwePayTpdCc&t=146s)

Additional Services:

In addition to brokerage services, I do offer landlords an advisory service. For this, I take on projects on a case by case basis and what I determine is the health of a real estate portfolio and a path forward. Sometimes this entails value add recommendations and sometimes it recommends a re-sizzling (technical term) of a portfolio. Successful projects have included recommend a landlord not sell prime properties in a growth market, guiding the 1031 process in a mature market, and lease review for potential weaknesses.

As always, thank you for the opportunity to discuss Atlanta Real Estate with you! If you ever have any questions or want to have a quick chat about the market, please reach out!