Real Estate Stats & Thoughts
from Your Friends in Real Estate
I’m Just back from a Four-day Georgia Association of Realtors Leadership Conference (I’m the president of my Board in Cherokee County next year) and here’s what I heard in the economic update session. Mark Vitner was an economist, and he specializes in the Southeast. He says our area is already off 4% to 7% from the peak (June of 2022) and that we should expect another decline though the end of 2023 to mid 2024 of another 5% to 8%. This is largely due to affordability. With the higher interest rates and the higher prices homes are less affordable today than ever. (Sorry for the lack of high-quality pictures.)
Mr. Vitner reported on the screen above he believes prices will fall 15% total from the previous peak about May/June of 2022. He also said he doesn’t expect to see interest rates below 5% again and that he sees them remaining in the 5.75% to 6.5% range for the foreseeable future.
The slide below shows that housing has been VERY affordable from 2008 to 2021. Last year affordability worsened due to the double whammy of higher prices and higher interest rates. See far right of the slide.
In our local Market, Mr. Vitner said that in 2022 Seven out of Ten homes that sold below the median price sold to investors who are planning on long-term holds.
The number of Existing homes selling each month has fallen for 11 straight months. This has increased the supply of homes for sale and will contribute to prices falling. They already have fallen some and will fall a bit more as supply and demand even out.
It is worth noting that supply and demand are not horribly out of balance, and we don’t believe they will get out of balance. Why? Because people who don’t “need” to sell probably won’t. They have extremely attractive fixed-rate mortgages, equity, and this may cause supply to fall, even with our “high” interest rates.
In the last slide below I am sharing, Mr. Vitner discusses some of the reasons for Inflation snuffing out economic gains.
Our Market Stats!
December 2022 to December 2021 (year over Year) has some alarming trends. The number of sales dropped 37.9% and the days on market quadrupled from 7 days to 28 on the average. However the median sales price still shows an increase of 10%. But comparing December of 2022 to our peak of June of 2022 tells a different story!
Prices have dropped an average of 7% and Number of sales has dropped by over 46%. This is a clear and alarming trend.
The media has yet to report this because they generally look at year over year data. There is some seasonality that causes prices and numbers to decline in December but these charts clearly show our market has shifted. What is the opportunity here? It will be time to buy investments again soon. If you need to sell – then we recommend selling now.
5 Common Property Management Mistakes We See When You Do Management On Your Own!
Over 70% of all residential rentals are done by the owner themselves. We see owners costing themselves time and money by not avoiding these common mistakes that can compromise your return on investment.
While being a landlord may seem straightforward, there are everyday things most people need to correct. At Northwest Atlanta Properties, we are property managers ready to help you actualize your dream of owning rental property without compromising available revenue sources. Let’s look at common property management errors landlords make and how to avoid them.
1. Not Being Rent Ready aka Not Keeping Up with Maintenance
One of the most important tasks of a landlord is providing regular maintenance. If a landlord doesn’t maintain the property, it may lead to low rent rates: Not to mention you may spend more in the future on severe damages. If you only own a single property, you may be tempted to handle maintenance on your own. However, hiring a property management company allows you to work with specialized contractors for permanent solutions. All appliances need to work. The carpet and paint need to be fresh.
2. Not Thoroughly Screening Your Tenants
The primary goal of owning rental property is to turn a profit on your investment. This means reducing vacancy rates to ensure you have a solid income-generating channel. Even if you have tenants lining up to rent your space, we recommend conducting an in-depth screening process to detect red flags before signing the lease. Our eviction rate is below 1% and our tenants love how we treat them with dignity and respect. This translates into longer stays, less vacancy, and better care of your property.
3. Not Investing in Marketing
Landlords need to invest in effective marketing to enhance the visibility of their properties. However, some are lucky with the market and get tenants right away. We go the extra mile to handle all the heavy lifting, from social media marketing to listing your property on all popular rental websites including the exclusive to Realtors’ Multiple Listing Service. We also make showings easy. One key plus to our small family-owned Property Management company: We answer the phone. You’d be amazed at how many tenants leaving other larger companies complain that they couldn’t ever “talk with anyone.” Our goal is to reduce vacancies by ensuring your listing appears in front of the target audience AND working well with tenants so they want to stay longer in your rental.
4. Mis-Judging the Current Rental Market
As a rental property owner, it is essential to check out the rental rates of similar properties within your area. The last thing you want is to set your rental rates too high or low, compromising your return on investment in the long run with less rent or increased vacancy. It is challenging for non-professional landlords to keep up with local rental rates without the inside knowledge those of us doing this every day have. Luckily, working with a professional and easy-to-contact property management company ensures that the asking rental rates are fair, giving you a competitive advantage.
5. Doing It All Alone
As mentioned, landlords with a single property often handle most tasks alone. They don’t get the advantage of working with the same plumbers, roofers, electricians, handmen, painters, flooring experts, marketing websites, and so one every day like we do. While doing it yourself seems like a cost-effective solution, it often costs more in added time off market or overcharges by vendors than hiring a professional. It can be especially challenging when you have multiple properties. Many owners simply underestimate the time and effort involved. Working with us is the best way to relieve the burden and optimize your profits. We solve problems and handle the behind-the-scenes work with property ownership, so you have more time and return.
These are common mistakes we see and ways to avoid them. Contact us at Northwest Atlanta Properties and schedule a consultation. We guarantee exceptional property management services at pocket-friendly rates.