By Kathy Dean
With the resurgence of the real estate market in Atlanta, condos and townhomes are high on the list of desirable properties. Many people consider them the perfect option for enjoying the best that city life has to offer. Others find condos a cost-effective way to live Intown.
A report by Dorsey Alston, Realtors shows mid-year home and condominium prices around Intown, specifically Ansley Park, Virginia-Highland, Morningside and Midtown, have risen substantially over this time last year, while the number of listings is up across the metro Atlanta area.
Intown single family homes have increased both in number of units on the market (up 19 percent) and in average sales price ($710,624). The condo market has seen a similar increase, with new listings up 4 percent year-to-year, and average 23 percent increase in sales price.
“Single family detached houses in Intown neighborhood that were on the market for high $300s to the high $400s a few years ago are now selling in the high $600s to mid $800s,” said Christopher Burell, Senior Vice President and Managing Broker of The Intown Office of Harry Norman, Realtors. “Most new construction single family homes in popular areas like Virginia-Highland, Morningside, Midtown and Decatur are topping $1 million plus. Condos and townhomes offer a more affordable option for clients who still want to be in the neighborhood.”
Scott Eaves of Epic Development explained that economic factors such as low unemployment, new businesses moving to Atlanta and the work-live-play mini-cities around the city, like west Midtown, Old Fourth Ward (O4W), the Memorial Drive corridor and Glenwood Park, have all contributed to the upsurge in condo sales. “We’ve seen an increase of empty nesters moving from the suburbs to the city as well,” he said.
This helps explain statistics that show new townhome/condo starts up by 25 percent in the 2nd quarter of this year. Closings are also up 8 percent over the last 12 months while inventory is down by 6 percent.
“Remaining new construction inventory continues to sell,” noted Anne Schwall, Vice President, Developer Services, Atlanta Fine Homes Sotheby’s International Realty. “In the last 12 months, there were 337 condo/townhome sales tracking on par with 397 sales in 2015. These relatively low sales numbers are actually a result of a lack of new construction inventory. The supply of available new construction projects has dropped significantly from 143 projects in 2008 to just 46 as of the mid-year.”
There are currently only 34 unsold units in new condo buildings, indicating a high demand for condo product. The increase in resale condos also shows that the market remains strong. Since January, a healthy 1,776 condo resales were recorded, and resale pricing is up 5.2 percent.
These numbers have developers looking towards high-rise condo towers for the first time since 2009. According to Schwall, the saturation of the apartment market, coupled with the success of smaller boutique condo projects like Seventh Midtown, which sold out before completion, is giving developers the confidence they need to move forward with plans for condo projects, as well as the ability to secure financing.
“We’re starting to see some new development in townhome projects and a few condo buildings,” said Jennifer Kjellgren, Founder/Broker of Intown Expert Realty. “The majority of towers going up around the city are apartments, and that’s partly due to the difficulty of financing available to developers of condos.”
However, she added that she believes that some of these projects will convert from apartments to condos in the near future, based on the high demand for condos and the slipping rates for apartments.
Kerman Haynes, Vice President – CITY HAUS Developer Solutions & Berkshire Hathaway HomeServices, Midtown Office, reported that there has been no vertical development of condos for almost 10 years. The exception has been luxury condo projects and complexes with only about 10 to 20 units.
“Condo sales were kicked into high gear last year and the first part of this year,” Haynes said. “In fact, just about every unit has been at or above its pre-recession pricing for the past six months. In Midtown, there’s less than a 30-day supply of condos and townhomes. This is all very encouraging to developers, with so much demand and so little supply.”
The four15 Stacks project will bring 24 new townhomes to 415 Gartrell Street in the O4W, near the Edgewood Entertainment District and convenient to Downtown. The new development has prices starting in the $300s.
There’s more in O4W, too. A development is slated on Felton, and John Wieland Homes is building the Square at Glen Iris. Edward Andrews Homes has a new development going up in Grant Park, and several more will be appearing on Moreland Avenue and Memorial Drive.
Three new attached residences are planned in Midtown on 6th Street. “Numerous smaller communities will be popping up with as little as two units, since the R5 zoning in the City of Atlanta allows developers to build two attached units on lots that were more likely to be occupied by one single family home,” Eaves explained. He advises potential buyers to get in early, since most builders and developers are selling out before construction starts.
“I think what you see drawing attention right now are the luxury condo buildings,” Burell said. “One reason for this is that the construction cost for new major buildings is so high. Since developers have to list condo units at the high-end of the market to recoup building costs, we are seeing some amazing projects.”
Those amazing projects include: One Museum Place, the John Wieland project on Peachtree Street in Midtown; the recently completed Seventh Midtown, with retail space housing one of the first Starbuck Reserve concept locations in Atlanta; and 1065 Peachtree, with residences above the Loews Hotel that feature amazing views and amenities.
One proposed condo building in Midtown is poised to dramatically alter the city skyline: at 74-stories, 98 Fourteenth Street would become the second tallest building in Atlanta behind the Bank of America Tower. Olympia Heights Management and Perkins + Will said the first phase of the development would feature the main tower comprised of 382 luxury condo units, 180 corporate suites, 60,370-square-feet of retail, and 825 structured parking spaces. A second, smaller tower in the future would contain a hotel.
According to Burell, there’s a major need for new projects in a lower price category, specifically condos and townhomes that target buyers in the $250,000 to $400,000 price point.
Schwall said that townhomes still lead the charge for new construction development in the Intown markets. “Thirty new townhome projects are proposed this year, which will bring 1,587 new units. Townhome developers are snapping up infill lots in trendy neighborhoods, such as O4W, that are bustling with activity because of the popularity of the Beltline, Krog Street Market and Ponce City Market.”
Two notable new condominium projects coming to market this fall are Emerson Buckhead and The Charles. Developed by JPX Works LLC, Emerson Buckhead is a visually striking, 19-story building located at 2520 Peachtree Road that features 41 residences from 2,200 to over 8,000 square feet. The Charles, a newly announced development by The Loudermilk Companies, is the first full service condo building in the heart of Buckhead Village; the 20-story tower with 57 homes will offer expansive outdoor terraces and resort style amenities.
“The Westside neighborhood will see a great transformation in housing over the next few years,” predicted Schwall. “The area is ripe for development because there are still several tracts of land to be developed, especially townhome communities that can provide an affordable option to build.”
Developments already slated for the Westside include: The Quarter Upper West Side, a Cannon Equities large, mixed-used project that will include over 800 residential units, including townhomes, flats and city homes; and a Pulte project of 228 townhomes designed around a town square setting overlooking a park.
“Midtown is hot. Anything in Inman Park and O4W near the Beltline is hot,” Kjellgren said. “There have been projects in these areas that never hit the regular market and builders have been able to sell from signage only.”
She added that some of the buildings in Midtown that were built circa 2006, like Luxe and 905 Juniper, are holding a premium as they’re newer and smaller in scale, so they tend to target a move-up condo buyer or empty nester. “We’re starting to see townhomes sprouting up again, since financing is easier and they tend to have a little more space and privacy than a condo, yet still offer lower maintenance than single family houses.”