Foreclosures everywhere is 2008 on the horizon for Atlanta? (Peachtree City, Newnan: real estate, apartments)

[pit2atl]

I've been in the real estate business for about 5 years mainly managing a few rental properties. However, I keep a close eye on the Atlanta Market. Even with the massive influx of Ryan and D.R Horton building and throwing up communities everywhere, I am beginning to see communities 8-10 years old with tons of foreclosures.

So, my question is:
1. What type of mortgages are these preferred lenders placing individuals in?
2. What are the DTI ratios and credit requirements?
3. Are there even Freddie loans?

If there is a recession no-one know. However, if so I see the housing market getting hammered. Good time to scoop in and get something.

If Trump wins I think recession will be pushed out another 4years. However if he looses I see things getting bad in Atlanta's housing market quick.

My hypothesis is by 2024 the housing market will be very similar to 2008.



Thoughts.

[DreamerD]

Are you basing your 2024 prediction on trump leaving office? That's a bold prediction to have, especially since you think it will mirror 2008. What would trump leaving (assuming he does not lose the election) have to do with the housing market?

[pit2atl]

Originally Posted by DreamerD

Are you basing your 2024 prediction on trump leaving office? That's a bold prediction to have, especially since you think it will mirror 2008. What would trump leaving (assuming he does not lose the election) have to do with the housing market?

Pressure on the Fed to keep rates low. Corporate tax rates staying at 21% stock S&P heading to 3,500-4000 if he wins next year. The housing market will "artificially" stay afloat.

However if he loses the exact opposite I mention above will likely happen. I'm no Trumper just stating my opinion and prediction of housing market and why I'm seeing so many foreclosures.

[citidata18]

The main issue with Atlanta's market, from my unqualified observations, is a severe lack of supply. This is a huge difference from 2008, where there was a huge glut of unsold homes sitting empty.

In 2008, many of the prominent homebuilders (Peachtree City Development Corporation / Pathways Communities was one) went belly up, which has contributed to a constrained labor supply (leading to what remains of the labor pool being more expensive). In addition, Trump's tariffs on the material use to construct housing has really cut into builders' profit margins, forcing then to pass on this cost to consumers. The cost for land being much more expensive than pre-2008 (since the desirable parts of Atlanta are virtually at full build-out) also doesn't help.

This , in effect, is leading to a massive affordability crisis that wasn't nearly as bad pre-2008. There's pent-up demand for people who want to buy a home, but builders aren't willing to supply the homes they can afford because it's not profitable.

That being said, to the aforementioned point, what I have noticed in this side of town (Newnan) is an explosion of multi-family housing developments in various stages of planning / construction. 6 projects with ~300 or more units have been presented to the planning commission and city council since 2017. However, only 3 of them have been approved because of intense NIMBY pushback.

Beyond that, unincorporated Coweta County only has 2 massive SFH communities under construction (both between 500 - 700 homes each, one of which was put on hold for 10 years because of the recession), with the rest being fewer than 100 homes.

Obviously, I know that multi-family developments do nothing for real estate folks such as yourself (assuming you manage SFH rental properties?). But it does show that developers are still able to secure finance for housing with relative ease, unlike the sudden credit freeze that occurred in 2008. Ultimately, it's a lot easier for individuals to rent property than it is to qualify for a mortgage, and the minimum income thresholds are a lot lower.

[AtlantaYards]

Totally agree with citidata18. The 2008 housing crash was a result of speculative purchases of homes and the market was producing 3 x what is being built today. With that said, I think we could easily see a 20% price pull back in the most inflated markets if we have a deep and lengthy recession.

[Thulsa]

Here is a chart of the quarterly foreclosure rates for the USA.
https://www.attomdata.com/news/most-...wn-19-percent/
The trend year-to-year is toward fewer foreclosures, and it appears to make no difference which party is in control of the White House so we can leave that out of the discussion.

I don't have a long term chart for Atlanta (too lazy) but there is this: https://www.realtytrac.com/statsandt...ounty/atlanta/
You can see there was an large uptick in foreclosures from July to August as you said, but it appears to have dropped back down in September. The foreclosure rate typically has a lot of month to month variability, so maybe that is what we are seeing.

[architect77]

I also am amazed with all of the commercial construction that has taken place in the last 5 years.

It's hard to believe that more was built in the 2000s. If so, where are the equivalent (condos/ SFH, transit-adjacent living ) of Midtown's 40 new towers, Memorial Drive, and West Midtown growth located?

I can think of Lindbergh and The Shoppes at Buckhead, but not much more. They are miniscule compared to all that's recently been built.

I'm starting to believe that the development, lending & construction industry is controlled and boosted for other purposes than just satisfying demand.

Trump as a person is horrible and people should have stopped harping on that one month after his election.

His shattering of all expected behaviors of a US president & calling attention to make sure US gets a fair shake in all dealing with the rest of the world are goods things, because no one will know what future president's actions will be.

That's good from a national security standpoint.

His cutting of regulations rather than easing them a bit is what propelled our economy temporarily, but his administration is adding 1 trillion a year to our national debt here in the good times.

During the great recession it wasn't desirable but there wasn't much else that could stimulate the economy.

It is now a house of cards and will certainly lead to another recession pretty soon.

[DreamerD]

Originally Posted by pit2atl

Pressure on the Fed to keep rates low. Corporate tax rates staying at 21% stock S&P heading to 3,500-4000 if he wins next year. The housing market will "artificially" stay afloat.

However if he loses the exact opposite I mention above will likely happen. I'm no Trumper just stating my opinion and prediction of housing market and why I'm seeing so many foreclosures.

I want to make sure I understand. Are you thinking that trump has influence on the fed res int. rates , which affects mortgage rates? And u r thinking if he were to leave that int rates would go up? This would then lead to a lack of demand, which would trigger a recession?

I don't think we will see anything like 2008 because it was more of a huge supply issue. Homes were being built left to right. The fact that they were given permission to do so...it's like there was hardly any regulation at all. It's one of the reasons ATL was hit so hard. We in particular had a lot of supply. Come 2024 we won't have that problem.
If we do have a big recession, it won't be just because of housing...

[DreamerD]

Originally Posted by architect77

I also am amazed with all of the commercial construction that has taken place in the last 5 years.

It's hard to believe that more was built in the 2000s. If so, where are the equivalent (condos/ SFH, transit-adjacent living ) of Midtown's 40 new towers, Memorial Drive, and West Midtown growth located?

I can think of Lindbergh and The Shoppes at Buckhead, but not much more. They are miniscule compared to all that's recently been built.

I'm starting to believe that the development, lending & construction industry is controlled and boosted for other purposes than just satisfying demand.

Trump as a person is horrible and people should have stopped harping on that one month after his election.

His shattering of all expected behaviors of a US president & calling attention to make sure US gets a fair shake in all dealing with the rest of the world are goods things, because no one will know what future president's actions will be.

That's good from a national security standpoint.

His cutting of regulations rather than easing them a bit is what propelled our economy temporarily, but his administration is adding 1 trillion a year to our national debt here in the good times.

During the great recession it wasn't desirable but there wasn't much else that could stimulate the economy.

It is now a house of cards and will certainly lead to another recession pretty soon.

It was a really stupid thing to do. U don't pump money into the economy at atime of growth. It's not even like the growth at the time was sluggish. We had solid growth. And then the money went ro the ppl who tend to save. Lol.

[brown_dog_us]

I've spent my adult life in residential real estate. Most of that building and developing SFR.

I don't see a crash in metro Atlanta's SFR because the supply is low and there isn't a lot of building. I do think we will see baby boomers wanting to leave or downsize. Millennials should absorb those homes. Also, prices are higher in metro Atlanta, but they're still low compared to the rest of the US.

The area that could crash is apartments. 20 somethings tend to live in apartments and the youngest millennial is 22, so the median millennial is right around 30. Flipping apartments to condos will be the result of foreclosed apartments. This is a fairly predictable cycle in apartments, but this time lenders did start to restrict funding about 3 years ago.

btw, don't focus on foreclosures in the City of Atlanta instead of metro Atlanta. The City is only 10% of the population