The following is a guest post from Brian Dally, cofounder and CEO of GROUNDFLOOR, the first real estate lending marketplace open to non-accredited investors.
By all accounts, it wasn’t really a great year for football. Just 10 franchises posted more than nine wins over the regular season. Incredibly, The Houston Texans’ 9-7 record topped the AFC South.
By contrast, 2016 was a good year for real estate. Once the MVP of the financial world, real-estate got laid out when the housing bubble burst. Since the dark days of 2012, the market has been sweeping away the cobwebs and making its way back to the huddle.
The stalwart New England Patriots meet the upstart Atlanta Falcons in the big game on Sunday. As a football fan, I’m eagerly anticipating eating large bowls of chili, drinking cheap beer, and yelling at the television. As an Atlantan, and an optimist, I’m expecting my Falcons to win by at least 2 touchdowns!
Sure, you’re laughing, but that’s alright. I don’t have any money on Sunday’s game. I know better than to make an emotional bet. My optimism is better founded when it comes to the the bellwether real-estate markets going head to head in Sunday’s matchup.
During their first decade as a franchise, the Patriots were the Boston Patriots, and over the course of the last decade, the team’s performance has roughly followed the trajectory of Beantown’s well-established, resilient real-estate market. In 2007, just prior to the onset of the housing crisis, the Patriots famously went undefeated in the regular season. Of course, they lost a heartbreaker to the Giants in the final minute of the Big Game that year. It hurt, but New England fans could hardly expect much sympathy. Similarly, while the Boston real-estate felt the impact of the financial crash, it remained relatively well insulated from the most deleterious effects of the housing crisis.
The Pats went 11-5 in 2008 – missing the playoffs – and 10-6 in 2009. They picked up the pieces over the next two years, going 14-2 and 2010 and 13-3 in 2011. At the low point of the financial crisis, in 2012, the Patriots slipped to 12-4, hardly a steep decline. Boston home prices hit a low point that year, but this too was more of a “slip” than a nosedive. Along with the Pats, Boston remained a good bet.
The Patriots maintained a 12-4 record over the next three seasons. In 2014 the Pats lifted the Lombardi Trophy for the first time since 2004, and the Boston home prices returned to 2007 levels. This year the Pats had their best season since 2010 as home prices reached an all-time high.
When the Atlanta housing price index hit an all-time high in 2012, the Falcons had a phenomenal year, their second best in franchise history. For Falcons fans, the good times wouldn’t last. Our team fell to pieces. The Falcons won just four games in 2012 and just six in 2013.
Thankfully, from 2013 – 2014, Atlanta’s real-estate market maintained an inverse relationship to the home team’s record and began to tentatively climb. Over the course of 2016, the housing price index rose past 2007 levels to hit an all-time high. Meanwhile, the upstart Falcons became the surprise team of the playoffs: Atlanta will be playing in their first NFL championship game in 18 years, just the second time in franchise history.
The Atlanta Beltline, a 22-mile mixed-use trail project that will tie 45 neighborhoods together, reshaping the city and spurring development, was just recognized as a Semifinalist in the 2017 Innovations in American Government Awards competition. Even though real-estate prices are at all-time highs, there’s still a lot of value to be had in Atlanta, especially in fix-and-flip projects in Beltline neighborhoods.
Football is a game of inches. You might convert on a hail mary, but focusing on the block and tackle is what wins games. Real estate crowdfunding brings the same strategy to investing in strong and well-insulated markets like Boston and rapidly up-and-coming markets like Atlanta.
Very few of us have the opportunity to attend the big game this week; meanwhile, peer-to-peer real estate platforms are making real-estate investing a reality for everyday investors. Sure, the game would be a thrill, but on any given Sunday our couches are the best seats in the house.
Thanks to crowdfunding platforms, anyone can invest in real estate projects across the country, from the comfort of their own living room. Everyday investors are diversifying their portfolios and building wealth while providing borrower with access to the capital they need to revitalize neighborhoods and realize their dreams.
That’s a winning combination we can all root for.
Enjoy the game!