High Demand: Condo & townhome sales leave inventory shortage

A rendering of The Charles building in Buckhead.

It’s not news that Intown condos and townhomes are popular housing choices for Atlanta homeowners. With the popularity of the Atlanta BeltLine and the growth around it, real estate developers are working hard to meet the increased demand for condos in the area. And that’s good news, indeed.

“The intown condo market is predominately resales while much of townhome market is new construction, and both are selling briskly,” said Jenni Bonura, President and CEO, Harry Norman, REALTORS. “There are more for sale this quarter compared to a year ago in the same timeframe, however demand still exceeds supply,” she said.

Bonura said that while these two styles of residences are often grouped together, each tends to appeal to different buyers according to price point. Lower priced condos generally appeal to younger first time homebuyers or for use as a city residence for those living in the suburbs. Higher priced condos are often purchased by buyers seeking a sophisticated and luxurious lifestyle with a higher level of security and without the hassle of maintenance.

MODA Reynoldstown

“Townhome buyers are often people moving from a condo seeking more space and privacy without sacrificing the convenience of location, or buyers seeking to downsize from their single-family home,” Bonura said.

Most of the upcoming proposed Intown condominium projects are within the luxury category, with prices over $1 million. Bonura said that buyers consider a variety of factors such as location, amenities, price per square foot, quality of construction and ongoing operating expenses when evaluating any purchase, especially high-rise condominiums.

“There is demand for mid-range condos, and we expect that future projects will address this need,” she added. “More mid-range product will provide needed opportunities for move-up buyers.”

Karen Rodriguez, Founder, President of GROUP KORA and Co-Founder of CITY HAUS | Berkshire Hathaway HomeServices Georgia Properties, said that the Atlanta condo and townhome market is still in a major inventory shortage. “The resale market in 2014 and 2015 were on fire…especially in the more recently sold out buildings like Ritz-Carlton Residences, Sovereign and Brookwood.”

Rodriguez added that the market did slow down a bit towards the end of last year due to the election, global issues, etc., but it was also due to the announcement of newer projects hitting the market. As far as who’s buying the condos and townhomes in the area, Rodriguez said, “In the luxury segment, there’s always a large number of empty nesters, but we’re also seeing a lot more affluent Gen Xers and wealthy, older millennials.”

David Tufts, President/Principal, Ansley Developer Services, a division of Ansley Atlanta Real Estate, also noted strong sales for Atlanta condos and townhomes. “Overall, the condo market is really starved for new inventory,” he said. “There’s only about a months’ to a month and a half’s worth of product available, and those are mainly townhomes.” He added that a healthy market would have 12 months or more of available product.

Condo and townhome resales are generally selling in under two months, Tufts said. “Owners are in a very good position to sell their homes easily, and at a good price. The question is where they’ll go once they’ve sold.”

The Brownstones at Central Park

Tufts is seeing a broad range of buyers for Intown condos and townhomes, from first time homeowners to empty nesters. “We’ve heard so much about millennials not buying, but they’re coming into the market now,” he said. He explained that many were held back by student loan responsibilities, and they needed more time to gather their down payments. Now that the older millennials are buying, they’re coming in at a higher price point.

Tacha Costner, Realtor, Ansley Developer Services, a division of Ansley Atlanta, agreed. “There’s a mix of everyone coming in, from people who are downsizing to renters who are now ready to buy. We’ve also had quite a few of Coca-Cola employees who are relocating here,” she said.

Costner said that there’s been a lot of interest in the townhomes at Brownstones at Central Park in the Old Fourth Ward. Some of the big draws for intown homebuyers are the convenient location to downtown and the walkability to the nearby Ponce City Market and Inman Park restaurants.

“The intown condo/townhome market is off to a strong start for the first quarter this year,” said Anne Schwall Vice President/ Developer Services Atlanta Fine Homes Sotheby’s International. “Overall market indicators are showing a strong sellers’ market, based on the lack of available homes for sale.”

According to Schwall, the first quarter statistics show an average of three months of available inventory, and days on market stats are showing the same pent-up demand with homes staying on the market on average for less than 50 days. “The number of homes closed this quarter is down slightly from same quarter last year, but this dip could be more from a lack of choices than any signs of a weakening market,” she said.

Maisonettes at Mandarin Oriental.

Townhome projects continue to be frontrunners for bringing new inventory to the market. Projects such as Square at Glen Iris and Highland Park are showing strong sales for last six months, with averaging prices in the high $800s for 4-bedroom townhomes.

“Townhome and condo projects built close to the BeltLine are drawing record sales in both new construction pricing and well as appreciation for resale,” Schwall added. “Projects such as Tribute Lofts and The Stacks, built in 2007 and located in the Old Fourth Ward steps away from the BeltLine, are reselling for over $100,000 higher then when they first sold.”

There are plenty of new projects, both condos and townhomes, that appeal to homebuyers looking for an Intown residence.

In the luxury condo market, the Mandarin Oriental project still leads in overall sales, according to Rodriguez. While the building itself is not new, construction on the condos began in 2014 with over $65 Million in sales in just two and half years.

“We built out eight in 2014, sold all of those, built out the next ten in 2015, and then began building out the final homes at the end of last year,” she said. “These were selling so well that the developer took back four floors that were earmarked for the hotel and built out eight more homes in 2016.”

Rodriguez added that the name of the newly introduced product at Mandarin Oriental, Maisonettes, is a French term that means ‘a dwelling within a dwelling.’ The multi-level townhomes feature 4 to 6 car garages, large walled-in front yards and large back decks with outdoor kitchens. The $2.3 to $2.8 million residences are currently under construction with delivery at the end of the year. “We have only released the first two to the market, one of which has already gone under contract.”

The Brownstones at Central Park, 410 Felton Drive in the Old Fourth Ward, are also selling fast. The homes are priced in the high $500s to high $600s, and Costner said that buyers respond positively to the affordable price. “They also comment on the quality of the construction and our upscale finishes, like the high-end mouldings and marble master bath.”

The spacious floorplans feature 3 bedrooms, 3 ½ baths, 2-car garages and oversized kitchens, as well as master suites with indoor and outdoor sitting areas. “We had 38 townhomes and they’ve already sold out. Now we’re selling Phase 2,” Costner said.

Townhome communities are continuously popping up in the Intown markets, Schwall said. She pointed to a few condo projects that are gaining momentum. The Charles Buckhead, developed by Robin Loudermilk, is located in Buckhead Village and offers 57 homes ranging from $1.3 to $4 million. Sales have been brisk since opening in December, and over $32 Million is presold, making it possible for construction to start this month.

Broadview Place 

“Another condo project that continues to bring a new level of architectural appeal to the market is Emerson in Buckhead, with 41 units starting at $2.2 Million,” Schwall said. “For the Midtown market, a project that’s getting a lot of buzz is Opus Place, 53 stories high with 231 condo units. It will set the bar for Midtown pricing, starting at over $1,000 a square foot.” A one-bedroom Opus Place unit starts in the $700,000s.

“Many buyers of townhomes appreciate the ability to have all the features of a single-family home within walkable communities and without the burden of exterior maintenance,” Bonura said. “A couple of great examples are Highland Park, between Old Fourth Ward and Inman Park, and The Enclave On Collier within the Collier Hills neighborhood. Both communities offer spacious and well-appointed homes in the heart of vibrant neighborhoods.”

Tufts mentioned several other projects that are generating excitement. MODA Reynoldstown offers three- and four-level townhomes and highstyle flats constructed from healthy building materials. Amenities include a saltwater swimming pool, dog park and urban vegetable garden. The MODA concept is being expanded to a Decatur location, MODA on Church. Broadview Place in Buckhead will feature three- and four-story energy-efficient homes with open floor plans.

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