The “Hotlanta” housing market is cooling down

This week, we spoke with Nader Wahba of SoldFast Georgia about Atlanta.

Average home price: $387,752 (down 3.6% YoY)
Homes that sell over list price: 17.6%
Homes that sell under list price: 65.3%
Average rent: $1,873/month

How he got started: “Back in 2013, I bought a townhouse near a university and rented out the rooms while living in one of them,” Wahba says. “Then I spotted another townhouse a block over listed on Facebook. They wanted $87,000; I paid them $82,000 in cash. I held it for one year while renting it out for $1,290 a month, then sold it for $125,000. That deal showed me how much I enjoy buying and selling real estate.”

His market’s pros: Delta, Coca-Cola, Home Depot, and a bunch of other big companies keep the “Hotlanta” housing market hopping. And although the pandemic-era frenzy here has died down, “Atlanta has stabilized into a healthier normal with modest price growth and fewer emotional bids,” says Wahba, who has bought and sold over 100 properties.

Cons: Institutional buyers are active and aggressive here, plus property taxes have risen as assessed values catch up, killing margins. “Coupled with higher interest rates and prices, getting single-family rentals to pencil has become near impossible,” Wahba explains, who’s been reducing the number of long-term rentals because some no longer cash-flow well, transitioning to short- and mid-term rentals.

His advice: “Investing in properties with multiple units makes the math more feasible,” says Wahba, who recently partnered with a friend to buy a six-unit apartment building in rough shape for $300,000. “The monthly rents were only $400 to $800,” he recalls. “We renovated the entire building for $120,000, then raised rents to market rate, around $1,200 a month. Our tenants were very thankful to have updated units with new air conditioning.” Six months later, they sold the building for $575,000.

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