February 23, 2024

8 min read

A Tale of Two SFR Markets: Atlanta and Tampa Price Trends and Investor Activity

A Tale of Two SFR Markets: Atlanta and Tampa Price Trends and Investor Activity

Executive Summary

  • Atlanta and Tampa are key markets for institutional SFR, with Atlanta holding 13.3% and Tampa 4.2% of large operators' portfolios.
  • Institutions prefer suburban MSA locations, evident from the "U" shaped concentration of zip codes around city centers.
  • In Atlanta and Tampa, city and metro-level price trends have decoupled, with Atlanta's metro area significantly outperforming the city by 43%, while Tampa's city home appreciation exceeds its metro area's prices by 22%.
  • Investor activity in 2023 showed Atlanta with strong inflows, while Tampa faced consistent quarterly outflows, indicating a decline in investor interest.
  • Investor purchase to sale ratios suggest investor activity influenced MSA level prices in Atlanta positively and Tampa negatively.
  • Parcl Labs' API offers real-time price feeds and investor data, enabling advanced market trend analysis and decision-making. Sign up today to track these dynamics for your market.

Atlanta and Tampa are Top Institutional SFR Markets

In the realm of single-family rentals (SFR), large operators managing over 1,000 units highly concentrate their operations in select markets. Atlanta and Tampa stand out in institutional SFR investments, with Atlanta at the forefront, comprising 13.3% of large operator portfolios, and Tampa at 4.2%.

Institutions Invest Outside City Limits in Atlanta and Tampa

In our research, "Atlanta Alarm" and "Tampa Turmoil," we found that large operators don't evenly distribute their units across these leading markets. Instead, they target submarkets that align with their target customer and property type criteria, typically favoring suburban areas of Metropolitan Statistical Areas (MSAs) over urban city cores.

This is evident when analyzing the concentration of large operations at the zip code level in Tampa and Atlanta. The accompanying graphics highlight this trend: darker zip codes signify areas where SFR operators managing 1000+ units own a higher number of properties. The high-concentration zip codes for both MSAs are situated outside city limits, forming a familiar "U" shape around the city centers.

Tampa:

Nine zip codes account for 30% of the large operators’ portfolios in Tampa.

Atlanta:

Eleven zip codes account for 30% of the large operators’ portfolios in Atlanta.

Atlanta and Tampa's Home Price Trends Diverge in City Versus Metro Area Level Appreciation

At Parcl Labs, we analyze home price trends across different market levels to identify factors influencing disparate price performance. This analysis holds significant importance in top SFR markets, where movements by these operators can introduce volatility within the submarkets they operate. This was evident in the case of Vinebrook's sell-off activities a few months ago, which underscored the impact large operators can have.

In both Atlanta and Tampa, significant gaps have emerged between price performance at the MSA versus the city level. However, these two Southeastern markets exhibit a notable difference: Tampa's city currently outperforms its broader MSA, while Atlanta's city is currently underperforming in comparison to its MSA.

Currently, Tampa shows a 23% performance gap between city-level and metro-level prices, marking the widest decoupling of Tampa city and metro prices since our analysis began in 2010.

In Atlanta, the divergence is even more striking: currently, there's a 43% gap in the percentage price change per square foot between the metro and city, with the metro vastly outperforming the city. Moreover, Atlanta's city-level prices have recently plummeted, dropping ~5% in the past three months.

Could Investor Activity Be a Factor In This Price Disparity?

We've established key points:

  • Tampa and Atlanta are leading institutional markets.
  • Institutional activities, concentrated outside city limits in both Atlanta and Tampa, influence metro over city price performance.
  • Tampa's city outperforms its metro by a 22% gap, whereas Atlanta's metro outperforms its city by a 43% gap.

What could be driving these trends? A critical factor to examine is investor activity. Our "Investor Purchase to Sale Ratio" provides crucial insights by tracking investor inflows and outflows in pivotal markets. A ratio of 1.00 signifies a balanced dynamic, where each investor home purchase matches one sale, achieving a 1:1 equilibrium. Ratios above 1.00 indicate investors are acquiring more units than they're selling, while figures below 1.00 suggest the opposite.

Our recent analysis with ResiClub revealed that Atlanta remains a hub of investor interest, ranking third overall, while Tampa has declined to the lower third of the markets tracked for that analysis, experiencing negative outflows in each quarter of 2023.

This finding, alongside the earlier price data, suggests that investor activity may be bolstering price performance at the MSA level in Atlanta, while contributing to the weaker MSA level performance in Tampa.

Track These Dynamics Live Via Parcl Labs’ API

The housing market landscape is complex and constantly evolving. Teams that leverage real-time data can make faster, better investment decisions.

Parcl Labs API streamlines the task of identifying and analyzing these shifting trends, allowing users to anticipate market changes, like those observed in Atlanta and Tampa, ahead of general market consensus.

Sign up for our API today. Access real-time price feeds immediately, and stay tuned for the upcoming release of our investor purchase to sale ratio feature.

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