Atlanta Landlords Battle Squatter Squads
Plus Bay Area home sales collapse in December. Catch up on the biggest stories in CRE now---->
ATLANTA LANDLORDS GRAPPLING WITH SQUATTER SQUADRON
Atlanta is dealing with an unprecedented surge in squatting incidents within vacant rental homes.
🏠 Unwelcome Occupants: Recent reports estimate around 1,200 homes in the metro Atlanta area are illegally occupied. This phenomenon isn't just a nuisance; it poses serious safety concerns and financial strains for property owners, including some of the biggest names in America’s single-family-rental sector like Starwood Capital Group and Cerberus Capital Management’s FirstKey Homes.
🚨 Safety at Stake: The situation has escalated to dangerous levels, with instances of violence against property managers attempting to reclaim houses. One such confrontation led to a car chase through Lithonia, GA, ending with an employee shot in the leg. The risks involved have made even seasoned professionals think twice about managing properties in the area.
🔄 A Growing Problem: The National Rental Home Council highlights that Atlanta leads the nation in squatting cases among major US metro areas. Institutional investors find themselves particularly vulnerable, facing extended eviction processes due to backlogged courts and overwhelmed law enforcement agencies.
💡 Technological Loopholes: Advances such as self-showing rentals and easily obtainable fake lease documents online have emboldened squatters. Some manage to turn on utilities with minimal verification required by service providers, further complicating eviction efforts.
⚖️ Legal Labyrinths: Evicting squatters can be a protracted battle lasting six months or more. Property owners often resort to "intruder affidavits" but face counterclaims that delay removal processes. Even when successful, landlords are reporting substantial losses from unpaid rent and property damage—prompting some to exit the business altogether.
💬 Community Impact: Beyond individual property concerns, this squatting surge threatens neighborhood safety and livability. High-profile investors have reached out to local authorities for intervention amid fears of escalating violence and deteriorating community conditions.
🔍 Root Causes: Factors contributing to this crisis include technological exploitation by squatters, increased homelessness post-pandemic, and a dire shortage of affordable housing exacerbated by rapid rent hikes—a 34% increase since before the pandemic according to Zillow estimates.
For a look at how cities are tackling similar issues nationwide read Bloomberg's full report here.
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📈 Commercial Lending Rising: MBA forecasts a robust continuation into 2025, predicting a staggering 25% increase to $717 billion in commercial real estate loans.
Bay Area Home Sales Plunge: 🏠📉 In 2023, sales hit a 15-year low as high mortgage rates and low supply halt the pandemic buying frenzy. Despite this, fierce competition keeps prices high, with the median at $1.18 million.
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Stable yet Slipping: 📉 Multifamily property prices show no month-over-month change, but a notable 8.4% year-over-year decline, as MSCI's latest report reveals a market struggling to regain pre-pandemic momentum.
Oceanside's Urban Evolution: 🏗️ Developer seeks to transform hotel plans into 179 studio apartments, aiming for a high-density living solution in downtown Oceanside, amidst parking and traffic concerns.
Windy City Woes: 💨 A stark 26% sale loss for Mondial River West apartments near planned Bally’s casino underscores high-stakes challenges in Chicago’s real estate scene.
🏘️ Single-Family
Market Revival in New Jersey: 📈 After months of decline, N.J.'s real estate sees a surge with 4,916 new listings.
Breaking the Monopoly: 🏡 Efforts intensify to dismantle the National Association of Realtors' long-standing grip, promising a brighter future for homebuyers with potential 30% drop in agent fees. Antitrust actions and lawsuits could rejuvenate the housing market.
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💲CRE Finance
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📊Daily Data Visualization
December's modest uptick in US prices are relatively heartening to a market already buoyed by several recent rosy reports. With the Personal Consumption Expenditures (PCE) price index climbing by 0.2%, the inflationary trend appears to be softening, setting a potential stage for interest rate adjustments by the Federal Reserve.
Reuters on X: "U.S. prices rose marginally in December... bolstering expectations that the Federal Reserve will start cutting interest rates this year."
Inflation and Consumer Dynamics
December witnessed a dance between consumer spending and inflation metrics. While the PCE price index saw a year-on-year rise of 2.6%, aligning with November's figures, core PCE—which excludes volatile food and energy costs—also edged up by 0.2%. This core measure paints a picture of underlying inflation pressures easing, with a notable increase of just 2.9% over the year—the smallest gain since March 2021.
Simultaneously, consumer spending surged by 0.7%, buoyed by holiday shopping fervor, suggesting resilient economic activity despite broader uncertainties.
How Markets Responded
Financial markets have responded to these developments with mixed sentiments. The possibility of a rate cut has been pushed below 50% for March, reflecting caution in the face of ongoing economic resilience.
The stock market showed mixed reactions as investors digested these indicators alongside forecasts predicting continued robust consumer spending into 2024 but at potentially moderated levels compared to the vibrant growth seen in 2023.
Growth vs. Inflation Concerns
So, wow will these trends influence Federal Reserve policy decisions? And what impact will they have on broader economic prospects?
With core services prices excluding housing—a primary concern for policymakers—rising by 0.3%, attention is focused on whether current measures are sufficient to steer inflation back towards target levels without stifling growth.
Consumption patterns, influenced by both wage increases and savings drawdowns, could shape the trajectory of economic recovery and stability.
That’s all for today, but we’ll be back tomorrow with your daily dose of the commercial real estate stories you need to read. See you soon.
