Posted: Sunday, September 29th 2013 at 6:21pm
Metro Atlanta a hub for investor owned real estate
By The Associated Press
ATLANTA (AP) -- Real estate experts say investment companies are taking advantage of low home prices in the metro Atlanta region and have purchased nearly 40,000 of them in the past 18 months.
The Atlanta Journal-Constitution ( http://bit.ly/14TqAOP ) reported Sunday that figures from real estate data website RealtyTrac shows 13 of the top 25 counties nationally where institutional investors have made the greatest impact on real estate markets are in Georgia. The top six counties are all in the metro Atlanta region.
The newspaper reports investor owners are capitalizing on a large supply of cheap homes that were left throughout the region after the economic downturn.
RealtyTrac Vice President, Daren Blomquist, says the spike in investor owners is concerning.
"I think it's dangerous," he said. "It has some of the same characteristics that got us into the housing bubble in the first place."
Blomquist added that some who buy shares of investment homes - and some institutional buyers themselves - have never seen the properties they're purchasing, and aren't sure of what they're investing in.
"I'd rather have somebody here that owns the house," Otheree Bienville, of Snellville told the newspaper. "They're going to value their property more." About 20 homes in her Snellville subdivision have been purchased by institutional owners.
Investment firms bought 6,754 homes in the metro Atlanta region between April and June, which eclipses the country's second highest figure of 3,870 recorded in Dallas - which is a more populous area than Atlanta is.
Chief Executive of Colony American Homes, Justin Chang, says suburban Atlanta is a hot spot for investor owners because of job creation, deflated housing prices and an increasing population.
Investor owners buying properties in the metro Atlanta area has factored into the area's rising home prices. In April, home prices increased by 20.8 percent from a year ago according to the S&P Case-Shiller Home Price Index. The rise in cost was the highest ever recorded on the index.
Lee Budden, who once worked to find and purchase properties for two firms, said he thinks home prices may be increasing too quickly.
Sarah Edelman, a policy analyst with the Center for American Progress, said investor owners may lose incentive to maintain their properties if the prices begin to drop again. Investor owners are also avoiding some of the areas that were hardest hit by the economic downturn and could gain the most from outside intervention, Edelman said.
"Investors are part of the housing recovery, but they are not a housing recovery in and of themselves," she said. "We want to see a solid, stable recovery, not another boom and bust."
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