Atlanta Property Attracts Investors After Drop in Home Price Index

A record drop in the cost of Atlanta real estate has attracted investors seeking bargain property while the markets are still low.

The Standard & Poor’s Case-Shiller Home Price Index, Metro Atlanta home values decreased during August and September 2011, against the trend of a slight increase across the nation.

Despite the fact that the national index climbed by 0.1%, The average price of Atlanta real estate is at the moment 4% lower than 2000 prices.

“I think what has happened is that we have a combination of the investors buying, coupled with short sales and foreclosures, coupled with a hugely disproportionate number of sales that are under $125,000,” stated the president and CEO of Prudential Georgia Realty, Daniel Forsman.

A rise of foreclosures and short sales – where a lender agrees to sell a property for below its market value – has impacted Atlanta investment property, with over 25% of sales now being from investors.

With rental property demand increasing and the amount of first-time-buyers decreasing, a number of investors are taking advantage of the price drop and are purchasing buy-to-let properties in Atlanta. A white paper by Marcus & Millichap titled the fourth quarter Market Research Report for Atlanta, showed that vacancy rates have reduced by 8.5% In 2011, with the Atlanta’s rental market getting stronger.

Acquiring houses in Atlanta below their resale price, developers and investors can take advantage of increasing rent prices (rents have increased 1.5% So far this year) and can also potentially benefit from high capital appreciation when then markets recover.