DEL.ICIO.US(in some cases, not as much as you think)
The Atlanta Journal-Constitution
Published on: 07/28/06
With the youngest of their four children at Georgetown University, Mark and Mirjam VanStekelenburgwanted to downsize.
So, last fall they sold their house at Reynolds Plantation near Greensboro for $2 million and moved into their empty nest—a new $1.2 million classic brick house at Sugarloaf Country Club. They immediately expanded to add porches, patios, a pool and a spa with a small waterfall. The house now appraises for about $1.4 million.
 Kimberly Smith / AJC | ||
| Dr. Vikram Khetpal and his wife, Sadhna, moved from Mobile, Ala., to Eagle's Landing, a gated community in Henry County. Their 5,200-square-foot, five-bedroom, 4 1/2-bath house with its butter-colored walls, elaborate molding and curved staircase, had originally been listed for $1.2 million. They picked it up for a bargain $925,000, according to their agent, Rhonda Stamey of Gateway Realty.
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And it still has an unfinished basement.
Just a few years ago, any Atlanta-area house worth a million dollars was a mansion. Now, in hot areas such as Buckhead, and in gated communities such as Sugarloaf, buyers find themselves compromising or renovating as they plunk down seven-figure checks.
"Everybody wants everything," said Danny Storey, who built the VanStekelenburg's house and the addition. "It's hard to get it all in there for a million dollars."
Although most people only can dream of a home with all those zeroes on the price tag, the number of million dollar homes sold in Atlanta rose from 36 in 1995 to 554 in 2005, according to Steve Palm, president of Smart Numbers, a real estate research firm.
And despite a housing market that has slowed dramatically from a national perspective in recent months, real estate experts both here and elsewhere are continuing to express faith in Atlanta's ability to absorb the growing inventory in $1 million homes.
Mark Nash, a Chicago broker and author of 1001 Tips for Buying and Selling a Home, lists Atlanta as one of the markets where residential real estate is continuing to hold its value.
"There's still room for growth in the luxury market in Atlanta," Nash said.
At mid-July, more than 1,000 Atlanta-area houses, townhouses and condominiums were on the market for a million dollars or more, representing four percent of the single-family properties in the area's Multiple Listing Service.
That doesn't count homes being custom built.
Location, location, location
What buyers get for their million bucks depends on where they're buying.
Consider this: Two houses, same size, same floor plan, same builder. One, in a quiet, gated community off Cascade Road in Southwest Fulton County is on the market for $915,000. The other, in Buckhead, was listed earlier this year at $1.9 million.
Claudette Allen, the real estate agent who is selling the Cascade house with its marble foyer and two-sided fireplace, said prices in the area are racing upward.
But so are prices in Buckhead, said real-estate agent Neal Heery of Coldwell Banker. In Atlanta's hottest elementary school districts—Sarah Smith, Morris Brandon and Warren T. Jackson—expect very little for a million, he warned.
Heery believes $900,000 to $1.2 million is a "gap" in the Buckhead market.
Fixer-uppers or tear-downs on small lots generally go for less, he said, and the really good houses, old or new, start higher.
"I'll tell you what $900,000 to $1.1 million will get you in Buckhead," Heery said, "the very best lot with a tear-down. Great topography, great location, you just add the house."
Drive down Blackland Road, for example. At the top of a curved asphalt driveway, a broken slate walk leads to a house that is no more. It sold for $900,000 in January. Now, on the 1-acre lot where it stood among pines and hardwoods is a red clay hole and one wall of an old cement foundation.
A sign out front advertises "Will Build to Suit."
Even in the far-flung suburbs, from Forsyth to Fayette counties, a million dollars won't buy a top-of-the-line house in a top-of-the-line neighborhood.
"You can squeak in for a million," said Elizabeth Parker, sales manager for River Oaks, a John Wieland development in Fayette County's Tyrone. But the most elaborate custom homes are "over $2 million, close to $3 million," she said.
River Oaks owners have added steam rooms, dance floors, mother-in-law suites and all manner of home theaters, she said. One woman needed a closet to accommodate her 500 pairs of shoes.
Intown McMansions vs. the 'burbs
People are moving outward for green space and inward for convenience, agents and builders say.
As some exurbanites tire of long commutes to in-town jobs, they are relocating closer to downtown, demanding the same amenities they find in the new gated communities far outside the perimeter.
The result, in areas such as central DeKalb County, are million dollar mega-houses rising above modest brick-ranch neighbors.
In response, owners of smaller homes in hot neighborhoods in Atlanta and DeKalb and Cobb counties are fighting to keep from being literally overshadowed.
In May, DeKalb commissioners unanimously approved requests from Meadowcliff and Diamondhead, neighborhoods in the central part of the county, to create special zoning districts that would prohibit new houses taller than 28 feet. A developer has threatened to sue.
Keller Williams agent Kathie Frank is marketing a 5,200-square-foot neo-Craftsman home on a lot formerly occupied by a much smaller ranch in a central DeKalb neighborhood not far from Meadowcliff and Diamondhead. The new house is advertised at $1.1 million.
Frank said there's a demand for the super-size residences by people who want to live close in, but insist on more space and extras than the ranches and split-levels of the 1960s and 1970s can offer.
Other people are willing to forgo space and landscaping for convenience and comfort even closer in. They're looking skyward—to high-rises—for the features they want without the hassles of upkeep.
Buyers of million-dollar condos are frequently looking for a "lock-and-go, no-maintenance, full-amenity lifestyle," said agent Patti Junger, whose high-end listings include a penthouse recently renovated by Vern Yip of "Trading Spaces" fame. "Additionally, many have bought vacation homes elsewhere over the course of their lives and wish to spend more time there ...."
It's a lifestyle choice
Moving into a million-dollar residence is much more significant than mere bricks and mortar—or even stainless steel and marble.
"A million dollar home is not necessarily about the four walls of the house," said builder Pam Sessions, the award-winning co-owner of Hedgewood Properties. "It's much more about lifestyle."
People buying houses near the $1 million price point aren't just looking for square footage, said Lamar Cheatham, whose current projects include houses in the Anderson Farm communities in Marietta. Most buyers are willing to sacrifice space for "refinement in the appointments," he said.
Some features are almost-givens in million-dollar residences: 9- or 10-foot ceilings on the main level, stone counter tops, multi-piece molding and good closets. But don't look for exotic hardwoods or a big, finished media room. Those are extras more likely to be found in the 200-plus Atlanta homes listed at more than $2 million.
"Once everybody was happy with Formica counter tops," said Bill Grant, a veteran builder who works mostly in Dunwoody. "Then they went to Corian. Now they have to have stone of some kind."
And then there are maintenance and amenity fees to consider.
Beyond the lawn service and the security system, some million-dollar homes come with high condo fees or neighborhood association dues.
Magazines and television shows—whole cable networks devoted to homes—expose buyers to the latest and greatest in appliances and conveniences and they expect their builders to provide them.
"We sell comfort," Grant said.
All age groups moving up
The people who pony up the money — or sign their lives away on loans — for million-dollar residences run the gamut, according to builders and agents.
They are "people who've moved from within 70 miles and from around the world," said Parker of River Oaks in Tyrone. "Families and single young professionals. People in medical, dental, financial, media, music and sports fields. People who have worked hard for a long time and decided it's time to reward themselves. People who want to show the world they've arrived."
And, like Mark VanStekelenburg, retired CEO of U.S. Foodservice, "people downsizing from larger homes."
"They're not the CEOs or higher management," said Heery, who sells mostly intown. "The 50-plus CEO types, those people are buying at $2.5 million, or more than that."
People moving from smaller markets may find they have to sacrifice comforts at metro Atlanta's prices.
On a sunny late-spring morning, Dr. Vikram Khetpal and his wife, Sadhna, moved from Mobile, Ala., to Eagle's Landing, a gated community in Henry County.
Their 5,200-square-foot, five-bedroom, 4 1/2-bath house with its butter-colored walls, elaborate molding and curved staircase, had originally been listed for $1.2 million. They picked it up for a bargain $925,000, according to their agent, Rhonda Stamey of Gateway Realty.
Khetpal, who was joining the staff of Henry General Hospital, said they looked at about 20 houses. Some, on Lake Spivey, were "a little pricey."
He assessed the setting as movers hauled in boxes of books and dishes. There would be plenty of room for daughters Sasha, 11, and Simran, 7. An unfinished basement added another 2,200 square feet of potential living space.
But their former kitchen was bigger.
"Overall," said Khetpal, "I think our house in Mobile was better."
Where will market go?
Real estate market professionals and observers say they don't know where the trend will end.
In mid-July, more than 80 residences were listed in Atlanta for more than $3 million. The highest-priced house in the area's Multiple Listing Service was a house the size of a small county's courthouse on about 17 acres near Buckhead, listed for $14.45 million — twice the amount paid by William Henry Seward for Alaska in 1867.
Evelyn Ratterree, who started a marketing program for Coldwell Banker aimed at luxury home buyers, has watched metro Atlanta's real estate market for 35 years.
On the wall in her north Buckhead office hangs the framed paperwork from a notable sale she made in 1977. At the time it was the highest-priced resale of a residence in Atlanta real estate history: $475,000. Since then, she's sold homes to the late Coca-Cola chief Robert Goizueta and actor Burt Reynolds.
Her highest price house sale to date was $5 million — more than 10 times that 1977 record.
Not too long ago, Ratterree was looking for a house for a young man from a family whose business she had handled for years.
Frustrated after looking at house after house, he told her he realized he couldn't buy what he wanted for a million dollars in Buckhead. He built a house for $3 million.
A million-dollar house is still significant in the luxury market, Ratterree said, but in a new way.
"Is a million the ending point?" she asked. "Or, is a million the starting point?"
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