By Bob Pepalis
The home-sales market in the Perimeter area appears to be rebounding, although high-end luxury homes may take months longer to sell than lower priced homes.
For homes priced between $1.5 million and $3 million, “we’ve just been over-saturated. Now we are in an extreme buyer’s market,” said Cynthia Lippert, a broker for Keller Williams First Atlanta in Buckhead. She said the very small area of the Historic Brookhaven neighborhood fares better for the luxury market at the moment.
The news is better for less expensive homes.
David Hutchins, an associate broker with Re/Max, said houses for sale in the Perimeter area and priced $600,000 and below are moving very well, with a smaller supply than the demand.
“The inventory of homes has fallen to five months or less in the $600,000 and under price point,” he said, referring to figures revealed in the “Absorption Analysis Reports” by FMLS, the local Atlanta listing service.
“While we saw the market stabilize and even start to rebound in 2013, there remains one major challenge in 2014 – low inventory,” said Brett Duffy, managing broker for Coldwell Banker Residential Brokerage-Dunwoody. In May, 20,517 properties were available in metro Atlanta, up 6 percent from April, and 25 percent from May 2013. In May, just 255 properties were available in Dunwoody, up 13 percent from April and 21 percent from May 2013.
“Finding buyers is no problem – there are plenty – but there aren’t enough properties to meet the demand, particularly in the Dunwoody area,” Duffy said.
The average days on the market in May was 62, down from 70 days in April and 73 days last May. That’s a great sign for sellers.
The low inventory of homes extends to Sandy Springs, Brookhaven and Buckhead, said Tony Floyd, chief marketing officer for Berkshire Hathaway HomeServices, Georgia Properties. When they can’t find empty parcels, home buyers and developers have sought lots with existing homes to be torn down as new home sites.
New construction has always been desireable near the Perimeter area, Hutchins said. The new homes supply since the fourth quarter of 2007 has dropped so much that any new construction is doing well. Builders essentially did not build any new housing for the past three to four years.
Leigh Schiff of Schiff Realty Partners said it is a seller’s market.
“Good homes are experiencing multiple offers within the first 72 hours on the market,” she said. “These offers often result in offers above list price and without contingencies.”
Her clients have seen success particularly over the last year and a half since the market has turned.
Ashton Woods, a national developer, has experienced strong demand in its neighborhoods throughout metro Atlanta, and in particular at locations in and around Brookhaven, Sandy Springs and Dunwoody, said Michael Malloy, chief marketing officer for the company’s Atlanta division.
He said the market has steadily improved over the past few years as interest rates have remained low, demand has been steady and people have been able to sell their existing homes quicker than years past. Ashton Woods has seen more buyers move up to a higher price point. “The biggest difference we see is the increasing cost of land and increased demand as more developers are seeking “A” locations,” Malloy said.
At a price point between $200,000 and $750,000, the 2014 real estate market is performing better than 2013, both in value and sales, Floyd said. Investor deals and foreclosures made last year have resulted in fewer homes priced at $200,000 or less this year.
“Some areas still have substantial short sales and foreclosures. Some areas, such as Buckhead, Sandy Springs and Brookhaven have none,” Lippert said.
“I think the long-term outlook for real estate is good,” Lippert said.
In 2006, when the market was peaking in metro Atlanta, there were about 60,000 new homes being sold, Floyd said. During the recession, it was down to about 5,000.
At the recent “smart housing” conference, Floyd said it was shown that based on current numbers, approximately 16,000 new homes will be built in 2014. About 70 percent of those sales are pre-sales. New home prices are rising rapidly because of the short supply, high demand, issues with availability of labor, raw material costs rising and the time to get permits increasing.
“They just simply can’t get them out of the ground fast enough,” Floyd said.
He said brokers hope 20,000 to 25,000 new homes will be sold by next year, which will look more like what a market should be.
Baby Boomers and Gen-Xers are leading home sales, with people buying a second home following behind.
Floyd thinks part of what drives this trend is that first-time buyers can’t find homes they can afford that they like as prices rise. Qualifying for mortgages is back to normal and fewer people can qualify. So, more people are waiting until they reach their 30s to buy their first home.
The demand in this market also is rising because more people are moving to metro Atlanta because they want to be closer to their children and grandchildren.