Market Rebound: Atlanta’s Luxury Condos Moving Fast

The view from 2233 Peachtree

According to Kathy Dean with Atlanta INTown, Atlanta’s luxury condo market is back in a big way.

Real estate analysts are predicting 2013 to be a strong year for luxury condominium sales, and Atlanta has already seen a big jump in sales of upscale, Intown condos. With the Wall Street Journal reporting last month on Atlanta’s upswing in condo sales, confidence is returning to the market and increased interest is likely to reignite development.

The reason is obvious, as Anne Schwall, Vice President/SkyRise Group at Atlanta Fine Homes Sotheby’s International Realty, explained. “The luxury condo market is seeing so much activity because the single family housing market has rebounded strongly. In most cases, buyers looking for luxury condos $600,000 and up are empty nesters who want a maintenance-free lifestyle. The rebound of the housing market has allowed them to sell their houses and buy condos.”

Collin Ellingson, Managing Broker at Coldwell Banker Residential Brokerage’s Midtown Office added that many would-be luxury condo buyers were willing and able to sit on the sidelines for the past several years, but those discretionary buyers have now returned to the market.

The new construction luxury properties which delivered in 2008-2010, such as The Ritz-Carlton Residences, 1010 Midtown, Sovereign and the W Downtown, are at or nearing sellout. “Buyers have realized this and are jumping into the market before the new inventory is gone,” Ellingson said.

The Residences at W Atlanta

The Residences at W Atlanta– Downtown, has seen a huge sales surge; it’s already over 50 percent sold, although select two- and three-bedroom homes and penthouses are available. Likewise, Sovereign has 25 residences still available, and 1010 Midtown is 95 percent sold – just 12 homes remain. The Ritz-Carlton Residences in Buckhead are nearly sold out, with some floor plans no longer available, and The Astoria at the Aramore has closed out.

According to Bonneau Ansley III with Harry Norman Realtors, Intown is a big draw for empty nesters because it’s a wonderful place to live and a growth city. While he expects the market to continue to be strong and buyers to be able to get great interest rates for some time, he also noted that projects that sat stagnant for years are now sold out or nearly sold out.

Ansley used Regents Park at Peachtree as a prime example. “This property was the Southern Accents development of the year when it was completed in 2008. It used the who’s who of architects, designers and contractors, and no penny was spared in its design and construction. Most of the homes sold before the crash and before the project was completed,” he said. “When the folks who were signed up to buy could not sell their existing homes, it left this remarkable project in limbo for a few years. In 2012, there were over 10 residences sold there, out of the 23 available, leaving only one home left at the current time.”

The Residences at Mandarin Oriental

The Residences at Mandarin Oriental

Other condos that are close to selling out include The Residences at Mandarin Oriental, with just 17 available homes, the Aberdeen on Paces Ferry, with 10 residences left, and White Provision Residences also with only 10 homes available. Schwall pointed out that there are approximately 80 luxury new construction homes remaining in the $600,000-plus range, and said that the highest tier luxury properties, $3 million and up, such as The Residences at the St. Regis Atlanta, may take longer to sell based on the limited number of affluent buyers looking in that price range.

All through Intown, luxury condos are getting scarce. At the beginning of the recession in 2008, there was a nine-year inventory. The logjam has broken and now there’s an inventory of only six months. Atlanta real estate consultants Haddow & Company and other analysts are reporting that the Intown condo market has approximately five months supply of unsold inventory.

The deals that are out there are not likely to last long, according to David Tufts, president and principal of the Marketing Directors. “We are in a moment in time that won’t ever come back – a time of inventory at below replacement cost and wildly low interest rates. Available inventory is dwindling but demand is on the rise. According to the Haddow Report, for-sale homes have evaporated by 90 percent over the past five years. Development can’t keep up.”

Dac Carver, Vice President and Managing Broker of Beacham & Company, Realtors, agreed, saying that Realtors would expect the trend to continue, and maybe even accelerate, if there were more luxury condos being delivered, but there are not. Carver does expect, however, that many of the luxury apartment projects underway will be converted to condos, possibly even before the projects are finished, so the potential to keep it going is there.

“There are still opportunities because average home prices right now are below the 2007 peak and interest rates are at historic lows,” he said.

Everyone offered the same advice¬: don’t wait. The time to buy is now. Tufts added that while there are great deals to be had at The Residences at W Atlanta–Downtown and other luxury condos, buyers have to act quickly as the remaining inventory is selling fast Ellingson explained that since the replacement costs for existing luxury properties exceed current sales prices, the next round of delivered luxury condominiums will most definitely be priced significantly higher.

And he said, “My advice to potential buyers is this: Don’t try to time the market perfectly. Perfect timing involves luck. Instead, choose a Realtor who possesses a thorough understanding of the condo market, and who can help you to make an educated decision and negotiate a sound agreement.”

People Want to Connect Lifestyle with Technology

bildeA recent report from Better Homes & Gardens Real Estate showed that 42 percent of homeowners would be more likely to brag about a home automation system than a newly renovated kitchen.

Additionally, a separate survey conducted by the magazine revealed that 77 percent of Gen X and Gen Y homebuyers want their homes equipped with the technological capabilities they have grown accustomed to.

Many of today’s new homebuyers are younger than previous generations and extremely tech savvy. They grew up with smartphones, apps and Google searches and want to use technology not only in searching for a home but throughout the home itself. Even more mature homebuyers relocating within our region or moving to Southwest Florida from another part of the country wants to connect their lifestyle to current technologies.

New homebuyers would prefer high-tech rooms with surround sound, large-screen TVs and the most up-to-date A/V equipment to the formal dining room of the past. Some aren’t limiting technology to just one room. They’re transforming an entire property into a “smart home” with home automation systems.

As the homebuyer evolves, so does the home.

Home automation allows homeowners to remotely (or locally) control thermostats, lighting, TV and appliances. It can control security systems to let the kids in from school, play favorite music throughout your home, install a WiFi network to allow students to research school projects online, or monitor the family dog via webcam.

It can contribute to energy savings by making things easier to manage.

Cobb County Halloween Haunts

imagesLooking for a good scare for Halloween? Check out some of the terrors Cobb County has to offer:

Fall Lawn and Garden Care

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In the Garden

  • Fall is for Planting. Enjoy fall shrubs with blooms and berries such as Encore Azaleas, Camellias, Witch Hazel, Cotoneaster, Dogwoods, Beautyberry, Holly, Honeysuckle and Pyracantha.
  • Divide or transplant spring-blooming perennials.
  • More Color Please. Bring back the color in your garden by replanting a fall crop of annual flowers – Geraniums, Petunias or Zinnias in the full sun. Once temperatures really cool down, replace your warm season annuals with Pansies and Violas.
  • Plant perennials such as Asters, Joe Pye Weed, Chrysanthemum, Japanese Anemone and Ornamental Grasses for fall color.
  • Play with Ornamental Grasses.These versatile plants provide four seasons of interest and are often at their best during the fall when their “plumes” appear. They are durable, low maintenance plants and are rarely affected by insects or diseases. Looks aren’t everything. Not only do they add distinction to the landscape, they also add aspects of motion and sound. The gentle waving motion of the grasses, and the accompanying sounds create a peaceful atmosphere.
  • Garden for Food. Cool-season vegetable seeds and seedlings can be planted. Try cabbage, lettuce, beets, turnips, spinach, radishes, collards and broccoli; be sure to water thoroughly after planting.
In the Home
  • Watch the Water. As the humidity decreases you may need to adjust your watering frequency. If the plants are wilting increase the watering. If you see yellow spots on the tips of the foliage reduce watering.

For the Lawn

  • Keep it Going: Continue to mow, edge and water as needed. The best time to mow is in the evening when the grass is dry and temperatures have cooled.
  • To Fertilize or Not Fertilize. Fescue should be fertilized towards the middle of September with Atlanta Turf Special 31-3-10 and Bermuda will benefit from a “winterizer” fertilizer applied six weeks before you estimate the first frost. Do Not fertilize Zoysia, Centipede or St. Augustine grasses.
  • Plant Fescue seed. Use 6 pounds of seed per 1000 square feet and mulch with wheat straw to hold soil moisture and protect the seed from birds.
  • Prevent Weeds: The middle of September is the time to apply a pre-emergent like Pike Crabgrass Preventer to Bermuda, Centipede and Zoysia lawns to prevent winter lawn weeds.

For the Birds

  • Squirrel Problems? Keep squirrels away with special squirrel proof feeders like the Droll Yankees that won’t support the weight of squirrels. Unlike birds, squirrels have sensitive taste buds and won’t eat anything spicy – feed your birds with spicy bird food.

Are Real Estate Agents Really Needed?

Yeah, we’ve heard this question once or twice. What do you think? Here’s what the Washington Post had to say about real estate agents recently:

On [August 22], the quintessentially mainstream American real estate brokerage–Re/Max–went public. The housing market is hot enough, its initial filing explained, that raising investor cash could launch it into markets around the country it hadn’t yet reached.

But wait–real estate agents? Wasn’t the internet supposed to drive them out of business?

The online age has been hard on all kinds of middlemen, after all. Travel agents, for example, rendered obsolete by Orbitz and Expedia. Soft goods retailers, for another, outpaced by Amazon. The effect should be similar with people who sell homes: What do they have but what they know? And what of that can’t be better figured out through unbiased, publicly available data, crunched and presented on Web sites like Zillow and Trulia for free?

And yet, real estate agents are still with us. Sure, their numbers declined during the housing crash, and haven’t quite recovered:

Overall employment in the real estate sector. (Bureau of Labor Statistics)

Overall employment in the real estate sector. (Bureau of Labor Statistics)

But the sector may have been overinflated anyway. During the boom, real estate was considered a fast way to make easy money, and the unserious didn’t survive when sales dried up. “I think it benefited the profession, because it got a lot of people out of it that shouldn’t have been in it,” says Lindsay Reishman, who runs his own brokerage in Washington.

And now, according to the National Association of Realtors, agents are as widely used as ever: 89 percent of buyers retained one in 2012, up from 69 percent in 2001. It’s the same on the seller side, where only 9 percent sold a home without an agent, down from a high of 20 percent in 1987. According to the Bureau of Labor Statistics, they made an annual mean wage of $51,170, which is down from a high of $55,000 in 2008, but still up from $42,000 in 2003.

There are a few reasons why agents are still around.

– The post-crash world is more complex: The housing crash and ensuing tighter lending standards, as well as the prevalence of foreclosures and short sales, have made the average transaction harder to navigate without expert help. Getting financing and negotiating tricky contracts, for example, probably shouldn’t be done on your own. “There’s always something doing down the pike that makes the process more complicated,” says Scott MacDonald, who runs a Re/Max brokerage in Chantilly, Va.

– The internet improves productivity: When buyers can find out the homes they want through online research, an agent has to spend less time touring them around. Then, they can just come in and help with closing, and pick up the same commission. Some sites, like Redfin, offer lower rates for less wraparound service–but even Redfin decided last year to flesh out its bare-bones model to cover more home tours, and increased rates for buyers. (That could change more with services like Jason’s House, which allows agents to bid on buyers who only need a few specific tasks performed).

– The internet increases agent leverage over brokers: In most states, agents have to affiliate with a brokerage, like Re/Max, Long & Foster, or Coldwell Banker. But when they can self-promote online, they don’t need as much in return. “As agents over time were able to market themselves directly to the consumer, that puts the squeeze on brokers,” says Reishman. “Agents are in a position where they can keep more of their money, because they’re not reliant on the brokerage to get their business.” To adapt and add value, brokerages have scaled back on their office space–more agents now work from home, rather than a private cubicle–and offer trainings to deal with different market conditions, like house flippers and investors.

– People still don’t trust cheap things: Buying a home is a big decision, and people don’t tend to want to take a risk on a cut-rate agent, which is why there hasn’t been much undercutting or negotiation of commissions. “I think it does take place, but at least my bet is that at the end of the day, this is the biggest asset they’ve ever owned, so if you can make people believe you’ll handle that process correctly, people are wiling to pay for it,” says Reishman.  “I’ve been thinking seriously about saying, my commissions are going to be 8 percent, and people think, this guy is really good!”