Is there some sort of housing frenzy going on? (Smyrna: mortgage, buying a house)

[Tarzanman]

Yes, there is a frenzy. Depending on what you believe, the federal government is propping up the housing market with FHA loans as a defacto middle class entitlement.

There is some disagreement over the reasons, but some folks think that ending the entitlement would:
1. Be political suicide for whomever kills it
2. Destroy the "value" in a lot of real estate by removing a large percentage of buyers from the market.

More than a few people have drawn comparisons to the pre-2008 housing crisis market.

[JPD]

Part of the frenzy is speculation, but that's not all of it. Take this for example: Reynoldstown House Near Beltline was Snatched in Minutes - Missed Opportunities - Curbed Atlanta

Another example is a friend that lived in Cabbagetown. He listed his house (not a tear down or rehab) last year and it was under contract ten minutes after listing.

[waronxmas]

Originally Posted by jeoff

Long term many of these places probably will improve. The problem is that many folks see "long term" as being 5 years, when it may be closer to 20 (or longer). Some of the folks investing can wait, or will make quick profits. But, many are taking much greater risks than they are aware of.

You're absolutely right. Think of all the people who are kicking themselves over giving up on Midtown or Inman Park. People these days forget (or don't know) how big of a dump both neighborhoods used to be.

[travbo]

I think it is driven mostly by people understanding basic economics. The prices of rental properties has skyrocketed for the majority of my friends who live in the east side neighborhoods and the rental rates have reached stupidity vs home buying.

We have several married couple friends who've been searching for homes for 4+ months who get listings daily and the competition has reached a point that you pretty much have to visit a property within a day of it's listing to have a chance of landing the property. They've even looked at homes prior to homes being officially listed and not had the opportunity to see the inside of the homes.

Exacerbating the problem, in my opinion, is that current developers are only building/renovating homes in the 2,300 sq. ft. and larger and targeting individuals that can afford 400k plus.

[Tryska]

Originally Posted by ElleKaye

What do you think this is going to mean for the rental market which I think is way more expensive than it should be?

When I moved here, I bought a very good looking house in Kennesaw for what I thought was a reasonable amount of money. Considering the small amount of time I got to spend in it due to my commute, my opinion of what was a good or bad idea changed. A divorced person with no children probably doesn't need four bedrooms, which by the way, even though you are not there, can rack up quote hefty electric and gas bills.

So, I decided I'd rather rent in a location that suits me better which for now is Midtown. I think the rates are ridiculous though. I was fortunate that I was able sell my house before things completely burst. I know patience is a virtue, but I must admit I think vigorous sale of houses can only benefit who it turns out is ok with renting and never hiring someone to maintain a lawn that I will never see in daylight again.

I think it totally depends on rental availability. One thing (which is rapidly changing in most of the Urban Center), is there used to be a dearth of Market Rate multifamily rentals. So your choices were houses, super expensive small multifamily, or scary old apartment buildings. I think as more market-rate multifamily, well-managed rentals are built, the rents will start to even out, just based on supply and demand. For new complexes - I think the premium rates will start to even out in about 5 years, once construction costs have been recouped.

[red92s]

There is a lack of quality inventory in many of these areas, so anytime something is new to market it sees a ton of immediate interest, and will usually go quickly unless it has glaring issues.

[LovelySummer]

Matilda, this.

Yes ppl are making on the spot decisions bc inventory is low and any agent worth his/her salt has already advised his/her client of the same before even visiting a property. I don't even go to a property (whether I am buying as an investmt or to live in) unless the tax numbers, neighborhood, what I know about the house from online research is appealing. In other words, unless I'd be willing to make an offer on the spot. Otherwise, it's a waste of my time. The market is that tight. My agent and I go with the offer form literally in hand and strategize the offer inside the house. We already have the comps, etc before we go. Bc if you havent seen the comps, you could be wasting your time in even going.

Do your research before you go and go prepared to make an offer if you like it.

Originally Posted by travbo

I think it is driven mostly by people understanding basic economics. The prices of rental properties has skyrocketed for the majority of my friends who live in the east side neighborhoods and the rental rates have reached stupidity vs home buying.

We have several married couple friends who've been searching for homes for 4+ months who get listings daily and the competition has reached a point that you pretty much have to visit a property within a day of it's listing to have a chance of landing the property. They've even looked at homes prior to homes being officially listed and not had the opportunity to see the inside of the homes.

Exacerbating the problem, in my opinion, is that current developers are only building/renovating homes in the 2,300 sq. ft. and larger and targeting individuals that can afford 400k plus.

[hautemomma]

When we moved here a year+ ago, even houses in Marietta (East Cobb) would be under contract in about a week-two weeks. Where I am now, houses don't seem to sitting much more than a month - and sometimes less than that.

[eRosewater]

The rental market in midtown/VaHi/etc has been like this for ages (at least the 3 years I've been here). Desirable units rarely sit on the market for a full 24-hours.

Buying a house is a bigger commitment, but it doesn't necessarily take more time to make the decision. Once you've decided to buy and narrowed your search to a certain location the decision can be made on-the-spot.

It helps that everyone feels the Eastside neighborhoods (and really anything ITP) is a safe investment and interest rates are still low. Only time will tell if this is factual. My guess is that people buying in some of the first neighborhoods to revitalize (Midtown, VaHi, Inman Park etc) are probably already buying at the top of the market.

[matilda79]

Good points all around.

No offense to anyone who puts in a quick offer on a home, BUT:

I also have a hard time believing that a lot of buyers putting in offers within minutes of seeing a home listed are putting very much money down, especially not 20 percent. It's too huge a huge chunk of change to waste in a hasty decision.

Normally, if you're putting up half your life savings, you pause a minute to make sure that the decision is airtight. That takes more than minutes, more than 24 hours, IMHO.