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Hedge funds are making it harder for people to buy homes in Atlanta; local realtor weighs in

Last year, Atlanta was one of the top cities where institutional investors bought property from homeowners. However, this has caused a rift in the housing market.

ATLANTA — Atlanta's housing market is booming, but not everyone is able to buy a house. A big factor in this is the arrival of hedge funds in the market.  

According to the Atlanta Business Chronicle, Atlanta was one of the top cities where institutional investors bought property from homeowners last year. However, this has caused a rift in the housing market, leaving homebuyers scrambling to find their dream property. Renters are also left to deal with rising costs. 

Cheri Benjamin, realtor and CEO of Village Premier Collection  discussed how this has impacted the real estate industry.   

“There's a lot of hedge funds that are out there. They can outbid the average homebuyer and buy a lot. As some estimate, they're buying up to 50 homes per month,” Benjamin explained. “If you think about that, that's just in a small market. We're seeing them buy over that in the metro Atlanta market, which is causing a lot of concern for the real estate industry.” 

To many sellers, hedge funds seem like a “quick deal” to skipping the pressures of the real estate market, as these investors come in with all-cash offers that close under a short timeline. However, Benjamin said that these deals may actually leave homeowners getting terribly undersold due to extra fees like contingencies. 

“What we are seeing, what us agents are seeing is that the hedge funds typically are purchasing those homes 50, 60, $70,000 under what the neighbors can get if they actually used a realtor in order to sell their property.”

On the other hand, for homebuyers, the addition of hedge funds drives up the average prices of properties, and makes it difficult to compete with all-cash offers, in an already competitive market. 

Meanwhile Benjamin said renters "are noticing a huge increase per year from their rent.” 

Despite the fact that these institutional investors show no sign of leaving the market, Benjamin has a few tips to give homebuyers, including making the investors compete.

“Make sure you hire a realtor. Those hedge funds that come in, they're still going to come in, but now you actually can make them compete for your property..so list your home on the open market so you can take advantage of the market today," Benjamin added.

She also suggested that homebuyers start saving up for those big down payments and closing costs and make sure that they are getting themselves pre-approved.  Lastly, she said to be patient.

“Do not wait and don't get frustrated, your home will come to you.” 

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