Home & Real Estate On the Rise

Condo & townhome market surging again around Intown neighborhoods

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 an average 23 percent increase in sales price.

“Single family detached houses in Intown neighborhoods that were on the market for the 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 toward 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, Continued on Page 54