Deborah Harris is the hardest working Realtor in Atlanta and after 35 years, 1000 houses, 2000 lot sales, and 100’s of land and commercial deals, Deborah still loves real estate. She is a facilitator for various acquisitions, JV, site search, development. She has numerous awards (The Phoenix Award from the Atlanta Board of Realtors and Top Agent for Keller Williams International for April 2013), and dozens of designations. Deborah loves negotiating the deal, and is always striving to take her business to the next level.
Every time I mention a capitalization rate to a group of learning based, future investors, I get this blank deer in the headlights’ look (not that I have stared many deer in the face). So I decided to simplify the meaning and amplify the importance.
The capitalization rate(R) is the rate of return used to estimate the property’s value based on that property’s net operating income. Often called a Cap Rate (Rate), it is the method for determining the attractiveness of the investment for the potential purchaser.
First one needs to understand net operating income (NOI). The net operating income is the annual income minus all expenses. Expenses would include taxes, insurance, management fees, homeowner’s insurance, common area utilities and any other expenses that is paid toward running this particular piece of real estate. It does not include the mortgage… never. This rate of return assumes that the property was paid for with cash. Therefore, when you see income on this formula, we are talking about the net operating income, or, NOI which we will use the single letter I to designate. Read More >>
Pricing Properties Correctly - You Cannot Underprice a Property
By Deborah Harris on March 6, 2017
The Residential Market in Atlanta is HOT! This is evidenced by the rapid quantity of homes that are flying off the market in a matter of days, providing they are in proper condition and priced correctly. A Seller's Market occurs when the number of properties available for sale divided by average monthly sales to calculate how long it would take to sell the current inventory if no other properties were listed – when that number equals 6 months or less, a Seller's Market exists. Our metro Atlanta market became a Seller's Market during 2012 resulting in several changes benefitting sellers, as illustrated here using the peak of the Buyer's Market compared to where we were in 4Q 2016. Read More >>
After beefing up its film incentive program in 2008, Georgia has emerged among the top places in the world for film production. In less than a decade, Georgia has quickly become the “Hollywood of the South” with more movies and TV shows filming in the Peach state than most places around the world. A recent study has put Georgia as the third largest film industry in the world only behind the United Kingdom. However, with the recent BREXIT issues, Georgia’s film industry is expected to exponentially grow and possibly become the number #1 filmmaking location in the world.
For those that don’t know, Georgia gives film, television and digital entertainment a tax credit of up to 30 percent. Georgia’s Entertainment Industry Investment Act provides a 20 percent tax credit for companies that spend $500,000 or more on production and post-production in Georgia, either in a single production or on multiple projects with no caps on amount spent. Then, the state grants an additional 10 percent tax credit if the finished project includes a promotional logo provided by the state. If a company has little or no Georgia tax liability, it can transfer or sell its tax credits as well. These credits create significant cost savings for the production companies producing feature films, television series, music videos and commercials, as well as interactive games and animation. Read More >>
The Atlanta Real Estate Market Stats Reflects That It Is A Seller’s Market
By Deborah Harris on January 9, 2017
Atlanta continues to be one of the hottest real estate markets to rebound since the recession continuing through third quarter 2016. But, before we analyze the numbers, sellers must realize the following:
For the purposes of this article, my statistics for the third quarter are about the numbered areas below. Read More >>
The Rental Returns for Georgia are Better than Most of the US
By Deborah Harris on November 7, 2016
There are many reasons why Atlanta and Georgia have better rental returns than other areas of the country. Let’s analyze some of the reasons for our good fortune.
According to the Bureau of Labor Statistics, the total nonfarm employment for the Atlanta Metropolitan Statistical Area stood at 2,667,800 in August 2016, an increase of 71,000 or 2.7 percent, from a year ago. Regional Commissioner Janet S. Rankin noted that the Atlanta area had year over year employment gains of over 50,000 each month since July 2013. Nationally, nonfarm employment increased 1.7 percent from August 2015 to August 2016. The study had a few interesting observations or predictions. First they expect the fed to increase interest rates but fortunately by only .25-.5 points. Read More >>
Costar is a $1 billion, national comprehensive commercial database that provides marketing, statistics, demographics, traffic counts, true ownership, and other information on over 4.5 million commercial properties for national commercial real estate agents. They have researchers that make over 10,000 calls per day to brokers, agents, and owners to verify or change information making 5.1 million data changes per day. Recently, Costar purchased Loopnet which is a commercial platform available to the public.
Costar does Market Research Reports for major cities across the US which is what we are using for our comparison. Costar clients include: Read More >>
Area Announcements Affect Real Estate Values in Metro Atlanta
By Deborah Harris on September 6, 2016
As an agent for 35 years, I am that real estate agent that truly loves real estate. Yes, at the gym, or riding in a car on vacation, or, sunning on the beach, you will find me reading the Atlanta Journal-Constitution, Atlanta Business Chronicle, Neighbor Newspapers, Realtor Magazine, and the list goes on and on. I have this keen thirst for knowledge about what is happening and where and when in my home of over 50 years, Atlanta. Therefore, I decided local investors and rehabbers would really appreciate a synopsis of events affecting value in our city. I am breaking these events into area factors or areas of town for your convenience.
Several factors in Metro Atlanta are affecting area growth: Read More >>
Atlanta Area Statistics Are Important in Analyzing Real Estate Deals
By Deborah Harris on July 30, 2016
Atlanta, Georgia is one of the strongest real estate markets in the US and has favored Sellers rather than Buyers since spring of 2013. According to Realtor.com, the median list price in Atlanta has gone from just over $200,000 in 2014 to over $300,000 in 2016 and is currently leveling off. A $100,000 median price gain in two years is nothing short of fantastic. See Figure 1.
For the purposes of this article, we are talking about single family detached in these areas. See Figure 2. Read More >>
Land and lots just sat on the market for years during the last economic down turn and now are a hot commodity on this hot market. What most people do not realize is that land is a much more complex transaction.
How large is the property? Typically a lot is sold with an individual price for the entire parcel. Larger tracts are often sold at a price per acre times the number of acres. Properties in downtown areas with high density zoning are sold by the square foot, so a couple of inches will change the price.
First, what is the highest and best use? Determine first whether the property in the city or in the county. If it is in city limits, go to the city’s zoning ordinances. If not, go to county zoning. Is it residential, commercial, or agricultural? What is the zoning on the property? Zoning is usually stated on tax records. Unfortunately, all the counties and cities in Georgia have their own zoning codes and what holds true about a zoning code in one area, is totally different in another. Generally speaking, in order of density: Read More >>
As an agent with Keller Williams Realty First Atlanta for 15 years, I have watched our company grow from “Keller Who?” to Keller Williams Realty being the number one company in Georgia, and, our office being the number one office in the state of Georgia. Over this time period, the internet has become a dominate factor in communication with clients, and, between agents. Of recent, our office intranet (370 agents) and our company Facebook have become abuzz with agents requesting corporate rentals, also known as Short Term Furnished Property Rentals or Vacation Rentals in many tourist destinations and now many major cities.
My dearest friend of 20 years, Renata Circeo Louden, whom I have sold at least a dozen Atlanta properties to or for, and, who was the only rent and hold investor in Gary Keller’s Millionaire Real Estate Investor (page 364-I nominated her for the book), has had a successful vacation and corporate rental property management company in Atlanta and Destin, Florida for over 15 years managing over 100 properties. As she owns 20 properties in Atlanta and the Destin Area herself, she jokes that “I bought myself a job.” However, she manages to net her clients more money per year with less hassle, which is the reason of her tremendous growth. Read More >>
This past February, I attended the Keller Williams Family Reunion in New Orleans, along with 15,000 other “Type A” real estate agents. One of the highlights of this convention is Gary Keller’s Vision Speech. He makes this speech to educate us, so that hopefully, we will be the economist of choice in our market.
“You have to look at the past to predict the future”, says Gary Keller, “Mortgage rates are national rates.” Keller said, “While the government does not exactly know how to raise rates, but, low rates are helping affordability in most U.S. markets.” Mortgage rates averaged 3.85 percent in 2015, down 32 base points from the 2014 average. Since the Federal Reserve is now actively raising the federal funds rate, it is expected there will be upward pressure on mortgage rates in 2016.
Last year was the 5th best year in home sales in the history of home sales due mostly to the mortgage rates being so low. In 2015, 5.26 million homes were sold, making it the best year for home sales since 2006, which was the height of the market. In 2016, some slowdown in sales is expected as interest rates slowly increase. Read More >>
Atlanta, Georgia was one of the big real estate stories of 2015 and is #5 of the top 10 markets to watch according to Realtor.com. Home prices in the metro area rose by double digits over the last couple of years, outpacing most of the nation and are finally above their 2007 high prices. Although home-prices and appreciation has leveled off to some degree, continued gains are expected in 2016. Let’s look at this growth by area (Figure 1). For the purposes of this article, we are talking about single family detached in these areas.
Figure 1: Atlanta Metro FMLS Areas Read More >>
What is the Truth About the Current Atlanta Real Estate Market?
By Deborah Harris on March 6, 2016
The best statement about real estate is “Don’t wait to buy real estate. Buy real estate and wait.” by T. Harv Eker. Understanding the current market allows Buyers to maximize their ability to evaluate properties, receiving the highest value in their home search, and, Sellers to position their property to maximize money in their pocket while minimizing time on market.
Real estate is a supply driven market. When supply is less than 6 months, (currently 3.7 months), it is a seller’s market, a market condition that started in 2012. With fewer listings on the market, median prices rise, and sellers get a higher percentage of their asking price.
The number of sales, or, demand has increased this year after 2 flat years while the supply remained low. All these are indications of an improving market. Distressed properties are a negligible portion of overall sales, further reducing their negative affect on market prices. Those changes caused improvements on measurements that were already strong. The medians of sales price, sales price to list price(S/L) ratio, and days on market (DOM) were greatly improved. Read More >>