Home Buying in Atlanta>Question Details

wfpsw, Home Buyer in Kennesaw, GA

What cities in the Atlanta metro area have the most depressed real estate markets in 2013 and is recovery expected?

Asked by wfpsw, Kennesaw, GA Sat Sep 21, 2013

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I don't expect that the MOST depressed markets in the metro Atlanta area are going to see a big recovery any time soon, but they are ALL recovering somewhat.
Stone Mt. was extremely depressed but has already seen a turn around. I would rate it as the nicest area that still has plenty of good values and should continue to rebound.
In town, I would rate the East Lake and West End areas as ripe for the next rebound since all the most desirable areas have already bounced back
1 vote Thank Flag Link Sat Sep 21, 2013
I'll add Vine City, Lakewood, Hapeville and the 'hoods between Oakland City and Turner filed as the greatest potential potential long term holds at still depressed prices. Furthermore in a decade or two, the entire westside and southwestside will transform.

You feel me, Hank?
Flag Sun Sep 22, 2013
I sat on a plane Friday and thought to myself, I can't wait to share this with Hank Miller. My seatmates and I talked real estate for 2 hours and this article from WSJ on Friday was one of our sources for some deep conversation.

You asked a great question and it gives me the opportunity to share some of this article content with Hank.

Our market is shifty. So, all an intelligent human being can do is interpret good data in order to insure that they don't make a mistake in betting on a "recovery." However you want to subjectively define that word.

So, we are shifty. And this WSJ writer David Crook pretty much nails what shifty looks like on a macro scale - the article is in the web reference and here are the highlights:

1. This recovery leaves a lot to be desired.

" ...the best you can say right now is housing has leveled out after a 13-year roller-coaster ride that has seen massive government and Federal Reserve efforts to spur demand. Is that a recovery?"

2. The new boom is a rehash of the old one.

"Even when there are impressive-looking percentage gains outside of the old boomtowns, there's usually a deeper story at work. Consider this sobering stat: In the battle-scarred city of Detroit, prices in July were up 33% over a year ago. Detroit!

Detroit's new median selling price? $13,556."

3. Big businesses are doing a lot of buying.

"The companies' early investors are pocketing their double-digit gains and are now liquidating their investment positions by selling shares in their companies to the public on the stock market."

4. Investing in housing is nothing like buying a home.

"Corporate property investors usually buy with cash. Their acquisition and maintenance expenses are paid by rental income, and they're taxed on only the difference between their revenue and expenses. There are other real-estate tax advantages, including depreciation, that enhance cash flow but are unavailable to individuals. Losses can be carried over year after year and used to offset profits elsewhere. And real-estate investors have a leg up even on stock investors because they can avoid capital-gains taxes completely if they sell and buy "in kind" properties...

Homeowners, in contrast, usually borrow money, which means that, even at today's ultralow interest rates, the cost of a home over the 30-year life of a mortgage will be 70% or more above the purchase price. On top of that, homeowners must cover their maintenance costs with after-tax income."

5. Interest rates are on the rise.

"As interest rates rise to their traditional levels, generally between 5% and 7%, you can expect either prices to stabilize or sales volumes to decline. Ominously, the Mortgage Bankers Association this month noted a decline of more than 70% in refinance-loan applications since rates began rising in May and about a 15% falloff of purchase-loan applications.

That said, mortgage money is still a remarkable bargain. Today's 30-year fixed rates are still far cheaper than in 40 of the past 42 years. Even today's more elevated rates (4.57% as of last week)—more than a percentage point higher than in January—are less than the average rate for all of 2010.

Two years ago, like today, no one believed rates could fall further. Indeed, the warnings were that rates were bound to rise. And then, like today, it was a great time to buy a house."

Boom boom...
0 votes Thank Flag Link Sun Sep 22, 2013
KENNESAW has not escaped the recession. However, I would consider within your more immedoate area, probably with in a 7-8 mi radius. I have sold a couple recently. bscyphrs@aol.com. I can help.
0 votes Thank Flag Link Sat Sep 21, 2013
When - not if - history repeats itself, the investor driven bounce seen over this year will lead to another drop by 2015. Institutional investors will bail as soon as something better comes along so you better have a very sharp ear to the rails.

The pattern of depressed to active to peak to depressed is a steady pattern in many Atlanta markets. Speculators, fraud, flipping and now major investors buying in bulk and driving up prices combine to make things exceptionally unpredictable. What's not unpredictable is that we will see a retreat from all of this investor action - it's already started in other cities where they jumped in heavy.
Web Reference: http://www.hmtatlanta.com
0 votes Thank Flag Link Sat Sep 21, 2013
I wanna make sure that you see this and correct a misspelling...I replied to Bill:

I'll add Vine City, Lakewood, Hapeville and the 'hoods between Oakland City and Turner Field as the greatest potential potential long term holds at still depressed prices. Furthermore in a decade or two, the entire westside and southwestside will be transformed.

You feel me, Hank?

Of, and I left out this quote from the article:

"In 2012, institutional buyers purchased about 140,000 homes in the U.S., or about 3% of all sales, according to RealtyTrac, a real-estate data firm in Irvine, Calif., but that tiny percentage obscures the impact of corporate buyers in individual markets. In July, institutional investors accounted for 25% of home purchases in metropolitan Atlanta and 20% in Tampa."

Uh huh...
Flag Sun Sep 22, 2013
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