As we wind up 2021 we are extremely grateful for the 56 owners who allow us to manage their properties and the 40+ families who were able to make a great decision about buying or selling once they had the best possible information, considered all options, and decided to use of proven cost-effective services to buy or sell in Northwest Atlanta.
On to our November 13th 2021 Email Update about Real Estate in Northwest Atlanta
Why smart investors buy real estate instead of putting it all in the Stock Market. With the slight uptick in interest rates (3.125% as of this writing – but near all-time lows) and the slow-down in appreciation we have started to see “press” about the dangers of buying real estate. Headlines like “The market crashing” will become the norm. And it is only natural to think about what to do with $100,000? The Stock market has appreciated just under 11% a year for the past 30 years (refer to this article); of course there is volatility but it’s a good rule of thumb. With housing prices expected to go up about at 8% for the 2022 and at 5% down to 3.5% for the following four years it may seem like the stock market is a better bet. However, leverage comes into play … see the chart below comparing investing $100,000 In the stock market versus buying a personal residence. (The numbers vary a bit for an investment but conducting a 1031 Exchange is a brilliant way to maximize returns.) It becomes clear that there’s a reason most millionaires in the United States owe their success to buying real estate.
Real Estate Stats and Thoughts
Our primary areas of service are below, and it continues to be an unusually strong sellers’ market. Average appreciation is just under 20% year over year, but the rate of appreciation is slowing from the highs of 26% year over year. Look for bad press to highlight these numbers while ignoring the terrific opportunity that still exists to buy a property that will appreciate!
The Number of sales in October of 2021 dropped significantly by over 24% (953 versus 1250) compared to October of 2020. Median Days on Market (how many days it takes a home to sell) skootched up 6 days to 7 days! On this note, don’t be concerned, because we had 30.5% LESS homes to sell and the sales only reduced by 24%… so we actually did BETTER on absorption rate this year than even last year.
Interesting note: For the second time in my memory median sales prices exceeded list prices in all the areas below (the last being July of 2021) which means many homes are selling for over asking. The small interest rate increase in September may help cool buyer demand but we feel the decline in sales is due to a lack of inventory more than any other factor, which continues to be at all-time lows. We still have buyers who cannot find a suitable home to buy and lose out in offers even going in well over list price. In October of 2016 we had 2938 listings, in 2017-2683, 2018-2920. 2019-3093, 2020-1726 (Covid time) and last month we had only 1204 properties for sale! No wonder # of sales are down… there is VERY little to buy! This was about 40% of what we averaged for the 5 years prior to COVID. Low Supply plus high demand = Continued rising prices.
Highlighted City: Ball Ground
The Next Woodstock or Cartersville in terms of appreciation may be Ball Ground. Named after game Cherokee Indians played – the ball-play – now known as lacrosse.
It is built upon several hills that sweep up from a level space to the south. There are new developments being started in this northernmost City in Cherokee County. It is 11 miles north of Canton. Driving there you’ll see a quaint town of 2560 residents at exit 27 off of Highway 575 The City prides itself on being business friendly and even has a slogan “Where we roll out the Red Carpet not the Red Tape.”
Pictured above is the Alfred Roberts House built in the mid-1800’s and remodeled in 1900. It is a Historic Property built in this agricultural community. In 1882 the railroad passed through it and the town was created with towns lots were auctioned off. Within two year the population had grown to 259 with three churches, a high school and a charter.
The main industry for years was the marble working industry although today there is a vibrant dining scene, vineyards, covered bridges on the Etowah River, and our favorite: the stunningly beautiful Gibbs Gardens to see.
Property Management Question of the Month
I want to attract Great Tenants what should I do?
Answer: Offer Amenities good tenants will love.
1) Allow Pets. Many owners or complexes will not allow pets. If you do, you’ll find eager and willing tenants. 68% of families have pets. In Georgia you can collect additional deposits for allowing pets to cover any potential damage. Tenants say in one report that they would be willing to pay $97 a month more in rent too!
2) Smart Home Features like thermostats, smart garage doors openers, smart locks, car charging stations, and smart lights can be surprisingly simple and inexpensive. You can then advertise as being eco-friendly with this high-end amenity.
3) Renovate. New carpet, paint and appliances homes get better tenants and higher rent! Stone countertops look great, last forever, and bring in $88 a month more in rent. Stainless steel appliances bring in $117 a month more. Tenants want to feel special.
4) Open floor plans with Owner suites on the main level are in high demand. If remodeling is needed, consider this, or sell what you have and using a 1031 Exchange buy a Ranch style home or one with Owners on the Main. We predict $/sq ft will grow more and faster in a home friendly so seniors and the disabled.
5) Private Outdoor space. Create a patio with room for a grill or a garden bed. Fence in the yard for additional privacy. One survey shows renters are willing to pay $90 a month more for private space.
6) Closet organizers and storage space – always coveted. But make sure the tenants know about this feature if you upgrade or renovate. Another thing to look at in a replacement property if you 1031 into something newer/better.
Have questions on maximizing your rental income? We are happy to consult with you for free. Put our combined 90+ years of experience to work for you! Give us a call at 770-726-1454.