By Kathy Dean
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 – 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.”
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.”