This is what the Atlanta real estate market looks like, from a broker
- Robin Andrade is a real estate agent from Atlanta and says she gets up to 60 calls a day.
- Market prices have soared 20% this year as people move to town for tech jobs and more space.
- Here’s what Andrade’s work looks like right now, as writer Elle Hardy put it.
This say-to-say essay is based on a conversation with Robin Andrade, a 50-year-old real estate broker and founder of Sell Atlanta in Atlanta, Georgia. The following has been edited for length and clarity.
I am a licensed agent who has worked in the Metro Atlanta area since 2007. Today’s market is the “Hunger Games” of real estate.
It’s a seller’s market. I have two phones to answer all the calls I receive, and they each ring 30 times a day.
It’s a pretty even split between buyers and sellers who call me. Some experts say that Atlanta is currently one of the most expensive real estate markets in the country. Prices have jumped 20% over the past year, while supply issues mean the average time on market has almost halved, from 25 to 14 days.
I survived my first stock market crash as a real estate agent in Atlanta from 2007 to 2008. This real estate bubble is not like that. Back then, it was your lenders who took advantage of people and gave them money when they knew they couldn’t afford to pay it back. It was as if they knew that these houses would come back on the market and they could buy four of them. And that’s exactly what happened.
There are a number of reasons why the market is so crazy right now.
Buyers and owners should be aware that some of their competitors could be corporations and hedge funds. They put their money together and buy two or three houses on the same street and keep them to rent out. This puts upward pressure on prices and demand, as there is not enough for ordinary buyers. Buyers are also matched against other individual buyers.
We have a lot of people moving from other places that cost a lot more, like Los Angeles and Boston. This means that there are a lot of buyers who are unfamiliar with the Atlanta market. This causes them to come out and grab whatever is there. Naturally, sellers put inflated prices on their property. And once it sells for that, that’s the new comparison price the market is working on.
Atlanta real estate prices have been on the rise since 2017, when the median sale price was $278.00. It is currently $424,000. As soon as interest rates fell during the pandemic, buyers who weren’t afraid to take the plunge were the real winners. The Fed may raise interest rates, but stocks continue to decline. Cash buyers continue to buy, but low-income people are excluded.
To put all of this into perspective, the average price for a two-bedroom condo in downtown Atlanta is currently $500,000. In 2014, you would have paid $350,000 for it. But in Washington, DC, you’re paying $1 million for the same property today.
Much of the demand comes from people moving to the city
Atlanta is home to opportunity, especially for people of color, and is now a hub for technology, so we have a lot of new people in town and young people trying to enter the market. In my neighborhood of Midtown, I look out the window at Georgia Tech University and Google. Microsoft has two buildings nearby, Facebook has moved in, and LinkedIn has grown. We are becoming the largest technology hub in the country.
While the real estate market is booming here, it’s still more affordable than on the West Coast. Buyers from places like California are switching from houses to condos. They don’t bring their heavy furniture and they want a lighter and simpler life.
Others from places like New York are looking for space. Many people are working remotely and now realize they don’t need to be stuck there. They can come to a city that is more dynamic but at the cutting edge of the technological world.
Millennials want to be in the heart of the city. They want easy access and to be able to get around on foot. The community is important to them.
Unfortunately, all of this means there is no value in the market right now.
Cash is king in this market. The bigger the portfolio, the better your chances of winning your auction, as properties that come on the market will receive 10 bids on day one. The highest cash bid I’ve seen win an auction is $450,000, and I’ve seen cash bids sell for $25,000 above the asking price. Sellers will usually opt for whoever can close quicker and easier and this is mostly done with cash. People even empty their 401(k) to buy property with cash – I had a client who used theirs for a down payment.
Brokers go to extreme lengths to find new properties. I’ve heard of brokers calling adult children of homeowners asking them to convince their parents to sell, but that’s not something I would do myself. It’s funny, I even get calls from agents trying to convince me to sell my properties.
I’m a listing broker and I’m still lucky to have salespeople call me directly. I haven’t had to change my strategy because I’m still having great success with people finding me through Google and social media. One thing I always have on hand is a box of tissues for buyers on the other end of the deal – they will feel several different emotions when they lose deals, usually anger first, then tears.
Aggressive investors hope to catch someone who doesn’t understand the market and make an easy sell by flipping
For example, if homes in the neighborhood are selling for $400,000 and you have a mortgage of $150,000, someone calling to buy will try to woo you with that $300,000 increase in value. They don’t mention that the property is worth way more than that because they want to acquire it from you and then turn around and sell it for a good profit.
The current situation concerns supply. This also affects new builds. The numbers should also make sense to the builder. Many wonder if they are building, will they be finished while the market is still up because there is so little value right now?
Eventually, the Atlanta market will stabilize and cool
Real estate trends tend to last around 10 years until broader factors cause the market to rise or fall. We don’t know if interest rates will continue to rise, so I encourage people to buy where they are if they can afford it. The only thing I tell them is if they see it, don’t sleep on it – it will be gone in a heartbeat.
Right now, it looks like the Fed is continuing to stop a recession by raising interest rates and hoping to level things out.
Over the past few weeks I have seen properties stay on the market longer in line with reports that the market is cooling slightly. People assume something is wrong once it approaches listing for 30 days because they are so used to properties flying off the market.
I tell them to relax – we just went through something no one has ever experienced before, and properties that stayed on the market for up to 90 days were normal until recently.