Wall Street Meets Main Street Atlanta Real Estate Report Podcast

The Atlanta Real Estate Report is a podcast & companion website for those interested in the Atlanta real estate market. This includes individual buyers, sellers and investors. It also includes architects, builders, developers, lenders, realtors and urban planners; anyone working in or supporting the local real estate ecosystem.
NEW » In addition to the Substack app, this podcast is available on Spotify and Apple Podcast.
PRO TIP » The text portion of this podcast contains dozens of hyperlinks, charts and graphs that are integral to the discussion. If you can have that open (preferrably on a desktop computer) while listening to the audio portion, you will get A LOT more out of it.
In this episode, we will…
* Consider how and where Wall Street and Main Street meet
* Discuss the benefits of understanding this dynamic intersection
* Look at some publicly-traded companies in the housing sector
* Explore how these Wall Street companies impact Main Street
* Learn what we can glean from stock charts and earnings announcements
* Take a sip from the Wall Street “fire hydrant”
Future Episodes…
* Looking Ahead to 2023…
* Institutional Investors: Who are they, and how do they impact the housing market?
* Real Estate Investment Trusts (REITs)
* Resources: Newsletters + Podcasts + YouTube channels
Let’s start with some definitions…
For the purposes of this discussion, the term “Wall Street” refers to the capital markets, in general, but especially equities. Our primary focus will be on publicly-traded companies in the real estate sector. The term, “Main Street” refers to economic activity, both at the local and national level. It also refers to us, as contributors to and beneficiaries of that econmic activity.

“When it comes to real estate, there are two ways we can benefit by understanding the relationship that exists between Wall Street and Main Street. The first lies in our ability to build equity by becoming owners in some of the most dynamic companies in the world. That is, to participate in the growth of this industry in ways that go beyond owning property directly. The second relates to the insights we can gain from the regular (required) reporting of the financial performance of these companies.”

Publicly Traded Companies: A Primer
* What defines a “public” company?
* They go from private to public via an Initial Public Offering (IPO)
* Securities trade in the public markets (NYSE, NASDAQ)
* Business and financial information disclosed to the public on a regular basis
* Ways to invest in publicly traded companies
* Stocks = Equity = Owner = Wealth Creation
* Bonds = Debt = Creditor = Income Generation
* Derivitives (options & futures) — hedging, speculation and income generation
* Investing vs. Trading (own vs rent; local vs tourist)
* Many people own public companies directly in the form of individual stocks and/or participate indirectly via ETFs, mutual funds and 401k plans
* Typically, larger than private companies
* Regional, national or international footprint
* Private companies tend to be local, especially in the residential RE space
* Continuous and real time “price discovery” while the markets are open
* Subtle but important point
* Makes them highly liquid
* Contrast this to direct ownership of real property
* Highly efficient vs highly inefficient pricing (objective vs subjective)
* This is the key difference between stocks and real property!
* Stock prices are a leading indicator of…
* Economic activity at the index level (DJIA, S&P 500, etc.)
* Industry trends at the industry level (banks, home builders, etc.)
* A company’s outlook at the stock-specific level
Let’s look at a few charts to gain some perspective…
The sheer size of the equity markets makes them a powerful force when it comes to their economic impact on Main Street…
> > > Click on the images below to enlarge the charts…
In the chart above, note the move from the GFC low in 2009 to the pandemic high of