So, you may have heard a thing or two about the Atlanta Falcons playing a little ol’ game this weekend.
2017 is turning out to be quite a year for the team: A potential Super Bowl win + a brand new stadium to kick off the upcoming season. No big deal, right?
Knock’s roots are in Atlanta, so we know just how major this is for our friends in the market. In honor of Super Bowl weekend, we decided to take a look at how Mercedes-Benz Stadium—the Falcons’ new home— is impacting home sales in its neighborhood.
In 2013, the City of Atlanta approved construction of a new stadium for the Atlanta Falcons that would sit less than one mile from the previous stadium, the Georgia Dome.
One might assume that local residents would be excited about the positive economic impact to the neighborhood, but they had already been through dismay with the construction of the Georgia Dome.
Although the city implemented plans to build homes and boost economic development near the Georgia Dome, its construction in the early ‘90s didn’t do much to help residents. Two of the stadium’s bordering neighborhoods—Vine City and English Avenue—are among the lowest-income communities in the city, and were hit the hardest.
“[The Georgia Dome] cut neighborhoods off from downtown — literally creating some dead end streets — and starved the area of business activity,” the Atlanta Journal Constitution reported in 2012.
Many homes also went into foreclosure.
In 2012, the median price for the entire city of Atlanta was $165,000. During that same year, homes within a one-mile radius of Mercedes-Benz Stadium sold for a median of $72,000. Overall, homes in the city sold for 129% more than they did near Mercedes-Benz Stadium.
Since the construction of Mercedes-Benz Stadium was announced, we found that home prices in the area have increased significantly.
Just take a look at median asking prices and median sales prices within a one-mile radius for the last five years.
From 2012 to 2016, home prices within a one-mile radius of the stadium increased 147%. This line graph also shows that in 2012, sellers were pricing their homes too aggressively and were receiving 19% than the original asking price. In 2016, the tables turned. Sellers cooled it with aggressive prices, and buyers showed up willing to pay about 12% more than asking price.
Ah, how the tables turned.
There’s more to this story, though.
That one-mile radius surrounding Mercedes-Benz Stadium encompasses homes on two opposing sides of the spectrum. We know that the failed housing efforts after the construction Georgia Dome left tons of foreclosed and dilapidated homes in Vine City and English Avenue. On the flip side, we know that there are several buildings on the southern side of the stadium featuring higher-end, modern-style lofts and condos.
To get a more accurate view of how the different bordering neighborhoods are being affected, we pulled the data for single-family, detached homes vs. attached homes.
We found that in 2012, detached homes near the stadium were going for a median price of $23,000.
Meanwhile, condos/lofts were selling for $82,825. That is quite the disparity.
In the years that followed, sellers of both styles of homes overvalued their properties – pricing their homes significantly above what buyers were willing to pay.
However, something happened in 2016. Demand seemed to catch up. Sellers of detached homes asked for a median price of $65,000, and that’s exactly what they received from buyers. This sales price is still considerably less than what the rest of the market is seeing, but it’s a 149% increase over 2015. On the other hand, owners of attached properties were asking for $177,000 and sold for substantially more—$203,000. Buyers were willing to pay about 15% more than asking price for these units.
Although demand for detached homes in the area is nowhere near the demand for condos/lofts, this analysis gives us reason to believe that there’s opportunity for all sellers to increase prices.
Mercedes-Benz is bringing more than just football to the area, which could be prompting more interest from buyers. The construction of the stadium has given Atlanta the opportunity to host a Major League Soccer team for the first time. The arena will also cater to local foodies as some of the highest-rated restaurants in the city are on board as vendors.
One more thing: If the Falcons happen to move into their new home as Super Bowl champions, we might see demand for homes in the neighboring communities increase even further.
Now, it’s up to the home sellers to price strategically and get the best bang for their buck. To learn how to win when it comes to pricing, check out the Knock method.