David Tufts may be the dean of the metro condo scene. Since he started working the market in 1983, he’s witnessed the lows when sellers couldn’t give away condos, as well as the times when builders couldn’t put them up fast enough. “There’s always been an ebb and flow,” said Tufts, now president of the sales and marketing firm The Marketing Directors. “Real estate is cyclical. What no one saw coming was the Great Recession.”
That slump had a severe impact on the multifamily market, which includes condos and townhouses. First, buildings in the planning stages evaporated. Construction wrapped on most of what was underway, but with nothing new breaking ground the only available units were resales or those in final building phases. At the same time, sellers hung on to their properties, hoping an improved economy would bring higher prices. The result: Today’s pent-up demand.
For example: Last year, 227 condos sold in Buckhead. Today, that same area has only 64 units available. Prices have risen along with the demand: Last year’s $366 per square foot is now $413.
“The big story here is that condo supply is at an all-time low, and there is virtually no new product available,” said Tufts. “At the same time, there are hardly an resales, but there is a demand, which means pricing is starting to go up dramatically.”
While most of the new construction has focused on apartments, the first wave of new condo projects is coming in the form of townhomes, said Tufts, because they’re the easiest to build.
“You can put townhouses up in five, six, eight or 10 units – not 100,” he said. “So we’re now seeing several townhome projects becoming hugely successful.”
Two of the newest projects are 5th & Piedmont in Midtown, where six units priced from the mid-$700,000s to the low-$800,000s are under construction; and in Reynoldstown, 65 townhouses in the Moda Rtown project, priced from the high $290,000s.
As for traditional condos in multi-unit buildings, buyers have a short list to work with. Units at the Atlantic in Midtown’s Atlantic Station are selling quickly, with one-, two- and three-bedroom plans ranging from $302,900 to $613,900. A few penthouses, starting at $1.3 million, boast more than 3,000 square feet. Penthouses are also available at W downtown, listed from $1.2 million. The attraction in these buildings is not just their locations but amenities such as 24/7 concierge service, pools, outdoor fireplaces, barbecue grills, dog walks and fitness centers.
The market got a bit of a boost recently with the announcement that the 52 apartments atop the Loews Atlanta Hotel are converting to condos. “The time is right, the product is beautiful, and it will be a very successful project,” Tufts predicted.
Coldwell Banker-Atlanta agent Chrishena Stanley has been working the intown condo market for eight years and has also seen how the lack of supply is making units harder to find.
“There used to be a glut of inventory; now, over the last two years, we’ve seen the complete opposite,” she said. “In the newer buildings like 1010 Midtown, there have hardly been any units available. But it’s starting to turn around.”
Stanley’s buyers have found the biggest selection in Midtown, where the condo craze redefined much of Peachtree Street and surrounding areas before the recession. They’re apt to find units at 1010 Midtown, where prices often start in the high $200,000s, or at the new 867 Peachtree that’s being pre-sold as construction continues. She’s also seeing units pop up for sale in Buckhead, spurred by the opening of the Buckhead Atlanta shopping district.
Regardless of where they’re shopping, her buyers tend to fit a few specific profiles.
“We’re definitely seeing more people moving back intown from the suburbs,” she said. “They’re giving up those long commutes. We also have more Fortune 500 companies moving in, and with the film industry expanding, there are a lot more transplants moving here for the job opportunities. And most of them want that live-eat-work-play situation where everything is close by.”
Buyers will find more options by expanding their search to several zones on the edge of the Perimeter, where townhouses have been particularly successful. Josh Hilscher, vice president of sales and marketing for Traton Homes, said townhouses fill the niche between single-family houses and one-level condos.
“A townhouse is a hybrid that works in the outer regions where land has gotten so expensive for (building) single-family homes,” he said. “They work for the buyer who wants something a little bit different instead of a smaller condo or an apartment. In these communities, they can get a 2,500-square-foot townhouse with a garage for about $375,000.”
Most of Traton’s townhouses offer three full levels of living space, which translates into roomy square footage that appeals to empty-nesters moving out of single-family homes. To match that market, many units feature elevators that can carry aging knees from the basement to the top floor. The 40 units at Vinings Parc, not far from Cumberland Mall, will have elevators, as well as granite counters, hardwood floors and fully maintained exteriors and grounds. Traton also has mulitlevel townhouses at LaFayette Square in Sandy Springs and Hawthorne Gates in Smyrna. Most feature 2-car garages and high-end finishes.
“It’s a lock-and-leave style that empty-nesters are gravitating to,” said Hilscher. “But it also comes down to ‘where are we going to put this beautiful dining room table?’ With about 3,000 square feet, it will fit.”
As so many developers are doing, Hilscher is keeping a close watch on the area around the Perimeter and Interstate 75, close to where the Braves stadium is going up.
“There may be more happening inside the Perimeter, but there’s the potential for a lot to happen in that area,” he said. “And areas such as Vinings and Sandy Springs have always been great places for condos. I think we’ll see more in those closer-in areas as the demand grows.”
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