Decline in Atlanta home prices worst in recorded history (Sandy Springs: rental market, how much)

[ATLTJL]

I'm not saying I agree we still have a long way to fall, but that is certainly a valid concern.

For a long time now I have feared a mass exodus from Atlanta as it becomes too much of a hassle to live here and young people don't want to come here anymore.

Just think, we are only a couple of major corporate HQs pulling out of this market away from a complete meltdown. Delta is probably stuck here with the airport hub, but there's not too terribly much stopping firms like Home Depot, Chick-fil-A, Turner, or Coke from deciding there are greener pastures elsewhere.

[lastminutemom]

Sorry, but Chick Fil A and Coke aren't going anywhere. Very, very tied to the Atlanta area. Same with Home Depot -- founders are still here. Maybe in 30 years when they are gone.

The challenge is attracting new headquarters that have sizable employment. It isn't easy to do.

[FromGA]

Originally Posted by neil0311

I don't want to argue, but what you describe is the definition of offering you opinion. Doesn't matter to me. Rent if that's what you prefer to do. I couldn't possibly rent for less money than what I'm paying for my mortgage (which includes escrow for insurance and taxes), and get anything close to what I have.

I just refinanced my mortgage to a 15 year loan at 3.25%, paying exactly the same as what I was paying for a 30 year at 6.25%. I'll payoff my home 10 years sooner with little added cost. Even if my value on my home doesn't go up one dollar between now and 15 years from now, I'll still be able to sell and take equity with me.

If you rent for 15 years, you will be paying possibly more than me for less of a living space (rents are higher now due to demand), and what is fact is that when you move, you leave every dollar you spent with the landlord.

To each his own, but the general consensus is that buying is now a better financial decision for most people, given credit worthiness and the other variables that for many people aren't a concern.

I dont want to argue either about the virtues of either side (buying vs renting). Each one's situation is different. In my case, I still own my first home, so I could consider that as my empty-nester home as well. Also, I intend to be move out of metro Atlanta in 2 years, so (4 already + 2 future) 6 years in this environment is perfectly fine (and better) for renting.

To all people who have been of a renting mindset: Not to worry. I can assure you there are plenty of people who would rather be in your shoes.

[ATLTJL]

You're right, those companies PROBABLY aren't going anywhere.

More at risk are companies that have relocated here from elsewhere.

However, Chick-fil-A is more at risk than you think. I'm pretty sure that when Truett Cathy croaks, there's a good chance Chick-fil-A will go public. I can't wait, because it will be the end of the closed on Sunday policy.....but it could also be the end of the Atlanta as a hometown policy.

I don't know about Home Depot. I do remember that when Ted Turner actually ran Turner, he would occasionally threaten to move his companies out of Atlanta when the city gave him grief about his buildings.

[mrpanda]

FromGA,
I agree with neil. I actually welcome all the negative press about Atlanta real estate as it gives me more incentive to buy investment properties in this environment. My valuation of real estate is very simple. With 20% down, and taking out a 80% mortgage. Is your carrying cost cheaper or more expensive to rent? I ignor all the news of shadow inventory and foreclosures that banks are holding back. What is most important to me is whether the asset is over valued or under valued.

My primary residence that I purchased last year summer has a $600 premium to rent than to own. The rental inventory levels in my subdivision is 1.7 month supply. My 30 year fixed mortgage is the same as that of a 3 bedroom apartment in new apartment complex called the Regency of Johns Creek and I live in a 5 bed/4 bath 3500 square feet SFR on a .36 acre lot in a gated golf course community. My carrying cost on this home is the same as my chicago townhome where the median household income is $55,000 and schools are mediocre at best. This is how i know that my primary residence is incredibly under valued.

Warren Buffet - "Be greedy when everyone is scared, and be scared when everyone is greedy."

Originally Posted by FromGA

I dont want to argue either about the virtues of either side (buying vs renting). Each one's situation is different. In my case, I still own my first home, so I could consider that as my empty-nester home as well. Also, I intend to be move out of metro Atlanta in 2 years, so (4 already + 2 future) 6 years in this environment is perfectly fine (and better) for renting.

To all people who have been of a renting mindset: Not to worry. I can assure you there are plenty of people who would rather be in your shoes.

[Stars&StripesForever]

Originally Posted by Gnutella

It's probably all the exurban **** losing half its value that's dragging Atlanta's numbers down. Draw a line connecting the following suburbs:

Kennesaw > Alpharetta > Suwanee > Lawrenceville > Snellville > Lithonia > Stockbridge > Jonesboro > Riverdale > Austell > Kennesaw

Everything inside that line is probably holding its value much better than anything outside it. Not necessarily saying that prices are rising inside that line, just that houses currently on the market outside it are mostly worthless at this point.

Wrong.

Parts of Mableton (southern side of Mableton) have seen homes decline substantially. Homes that were selling $140,000 back in 2006 can now be picked up for around $35,000.

The older developed suburbs within that line have not kept up with value, while places like Milton far outside of the line have.

[ATLTJL]

Holy cow, MrPanda, where do you live?

When you say your mortgage is less than a 3 bedroom apartment, I assume you are talking straight mortgage only, not including escrow.

Still, if you have a 3500 square foot home for the same as a 3 bedroom apartment, that is great. I thought you were in St. Marlo, but I don't think they have homes smaller than 4000 square feet, and I can't imagine anything in there for a monthly that low.

[back2dc]

Originally Posted by mrpanda

FromGA,
I agree with neil. I actually welcome all the negative press about Atlanta real estate as it gives me more incentive to buy investment properties in this environment. My valuation of real estate is very simple. With 20% down, and taking out a 80% mortgage. Is your carrying cost cheaper or more expensive to rent? I ignor all the news of shadow inventory and foreclosures that banks are holding back. What is most important to me is whether the asset is over valued or under valued.

My primary residence that I purchased last year summer has a $600 premium to rent than to own. The rental inventory levels in my subdivision is 1.7 month supply. My 30 year fixed mortgage is the same as that of a 3 bedroom apartment in new apartment complex called the Regency of Johns Creek and I live in a 5 bed/4 bath 3500 square feet SFR on a .36 acre lot in a gated golf course community. My carrying cost on this home is the same as my chicago townhome where the median household income is $55,000 and schools are mediocre at best. This is how i know that my primary residence is incredibly under valued.

Warren Buffet - "Be greedy when everyone is scared, and be scared when everyone is greedy."

Yeah but Warren Buffet has billions tucked away where he can live comfortably if he makes one bad investment. These poor families who buy houses that are underwater don't have backup assets. That one bad property investment in Atlanta could ruin them for life.

Buffet also invests in the global market, and not just in real estate. Atlanta real estate is just one submarket and currently the weakest in the nation. You're not comparing apples to apples.

Name one development on the horizon that is going to fundamentally change Atlanta around and raise property values again? More tax cuts? Another Olympics? These people that buy your houses are going to be stuck with cheaply built McMansions out in the exurbs in a declining Atlanta economy, as gas and energy prices continue to skyrocket.

That scenario WILL happen in the next few years as China and India drain natural resources and cause energy costs to rise. People who bought your homes in sprawlsville won't be able to afford to fill their tanks for the long commutes, repair their shoddily built homes, or cool/heat the massive interiors. When it comes to unload the property and flee Atlanta, they'll be unable to sell but at a loss, as educated people have already moved to more forward-thinking cities with less gas-draining sprawl and comprehensive public transportation networks.

Your quaint optimism with Johns Creek is very much stuck in 1980's Atlanta.

[testa50]

Haha...and Atlanta of course has the highest increase in rent over the last 12 months.

http://media.marketwire.com/attachme...ionsReport.pdf
Atlanta apartment rents rose 6.3% in first quarter - Atlanta Business Chronicle

Honestly the real estate situation in Atlanta right now is perplexing. Some maps that show where the transactions are happening, as well as some hard data on number of transactions, number of foreclosures, investor vs owner/occupant, etc might be illuminating. But I don't have time to look for and compile it.

Addressing ATLJLT's concerns, I think the four HQs you mention are probably the most tied to Atlanta, along with Suntrust. I don't think the thing that would lead to an exodus of young people would be a HQ or two leaving. It would be a hit but not a crushing one.

Nonetheless, I'm actually worried about Atlanta's economy more than I have been in months. The really recent data has not been good--it didn't come through in the AJC articles, but Atlanta gained no jobs between February and March. That flies in the face of seasonal trends; usually we gain ~15,000. This is the second worst March report in 20 years; only 2009 was worse. Housing prices continuing to slide doesn't help.

The Atlanta unemployment rate will be released tomorrow and in all likelihood it will go down, but that won't mean very much. We are in a tight spot and our recovery relies on the national economy doing well. The most recent national data hasn't been promising.

[afonega1]

Originally Posted by neil0311

Zillow's information is generally crap, but you make a mistake in your comments that many make. Values don't have to be trending down or up. They can be flat. Our value has been flat for pretty much a year or more. I'm hoping the next leg is up.

My appraiser told us that in this area of Cobb, there isn't much new construction, and the foreclosures exist, but not to the epidemic proportions in some other parts of the metro. I think we have one or two homes for sale in our entire subdivision right now. That means that supply may not be meeting demand as new buyers get more confident in the job market and try to take advantage of the low prices and low interest rates. There are also some companies who are picking up and starting to relocate people again. That also helps to mop up the excess inventory. 4 years is a long time for a market to remain so stagnant.

Numbers of foreclosures, quality of schools, crime, shopping, transportation, and other amenities will make a big difference from area to area.

Yes,I agree totallly.I am an investor in downtown.I have been buying and looking for property near the Vine City/Georgia Dome Area.In those neighborhoods houses are sold quickly and prices are rising.House being sold within a week of being listed.Why?Believe it or not:WAL-MART!!!
Since they broke ground its been hard too find the deals I could a year ago.