More, more, more: Luxury home market shows strong signs of recovery

By Kathy Lynn Dean
The real estate market in Atlanta is showing strong signs of recovery, and it’s especially apparent among luxury homes. Real estate professionals have seen the number of sales trending up and prices holding steady. In fact, many reported that the only thing that’s dipping is inventory.
Sales of Intown single-family homes stayed strong through 2012, according to Ken Covers, Luxury Home Specialist with Fourteen West Realtors. The areas of Morningside, Virginia Highlands, Ansley Park and Sherwood Forest saw a high number of sales across all price points.
“I had the best month of my career at the end 2012,” Covers said. “In December, I put over $5 million of property under contract – that’s six homes. And every day since Jan. 1 of this year, the market gets a little better, a little stronger.”
The improvement hasn’t gone unnoticed. AOL Real Estate ranked Atlanta number four in its Top 10 Turnaround Housing Markets in 2012. And there are plenty of numbers to support the optimism.
“Since the end of last year, luxury home sales are up almost 30 percent,” said Bill Murray, Managing Broker at the Buckhead office of Prudential Georgia Realty. “Compared to the same quarter a year ago, the sales are up 65 percent. Prices have stayed consistent, though the median price has gone up a bit.”
Buyer confidence and the resulting transactions showed a steady increase throughout the year, said Michael Rogers, Owner and President of Dorsey Alston, Realtors. Of the top 25 most expensive homes sold in the Atlanta market last year, only six of those transactions closed before the first of July, and 12 of the 25 transactions closed in the fourth quarter.
Rogers continued: “Another positive observation about the current trend in the luxury market is that a much lower percentage of the top sales were distressed sales in 2012 as compared to those of the previous year.”
In fact, foreclosures are down 33 percent from a year ago and, for all intents and purposes, they no longer affect the price points of homes. Short sales, however, still show up on the market.
Things weren’t rosy last year in all parts of Atlanta, though. In fact, in some areas, like Buckhead, the single-family luxury market was down until late 2012, when activity resumed a more normal pace.
“There was tremendous anxiety about the presidential election, which contributed to the reduced activity the first 10 months of the year,” reported Dac Carver, Vice President and Managing Broker with Beacham & Company, Realtors. “We saw the same type of activity in 2010, the last time there was a major national election.”
Carver went on to say that he’s now seeing improvement in the housing market on all price points. “We think the luxury market will have a much stronger start this year, in part because the large supply of luxury inventory should lead to price reductions and great deals that luxury buyers won’t be able to pass up.”
Buckhead does have a ready supply of luxury homes for sale, but that’s not true in much of Atlanta, as Murray pointed out. The last nine months show a declining inventory in Fulton County, Dunwoody, Sandy Springs and Brookhaven.
Covers reported low inventory in Morningside, Virginia Highlands, Ansley Park and Sherwood Forest, where there’s a shortage of homes in the upper price range, $900,000 to $1.5 million. It’s largely due to the fact that very little new construction has taken place since the economy hit a speed bump.
One issue, and one reason for the low inventory, is that many homeowners can’t get their homes on the market. They’re either underwater or don’t qualify for a short sale, and many don’t have the cash necessary to buy another home. However, Intown sellers who can put their homes on the market are seeing multiple offers for newly listed houses that are priced right – and many are sold and closed within 30 days.
“I’d say there are more people with money than good Intown homes,” Covers added. “We started seeing shortages in August and September of last year. Now, buyers are contacting agents about homes before they even hit the market.”
The Ritz-Carlton Residences in Buckhead exemplifies the state of the market: qualified, active buyers looking for realistically-priced, high-quality products. Rogers said that 96 out of the 126 units sold within two years, and $40 million of those sales were in 2012 alone. “These transactions were carried out without negotiating on price, which protected current owners and infused confidence in the product.”
Carver explained that luxury homebuyers shop by location first and foremost. “Almost all of the multi-million dollar sales every year occur in Buckhead. Luxury homebuyers prefer new homes followed by recently renovated homes. Luxury buyers like flat, walk-out backyards, top-of-the-line fixtures, large garages and master bedrooms.”
Intown buyers look for a walking neighborhood that offers features like the nearby shops and restaurants of Virginia Highlands and the organic Farmer’s Market in Morningside. While these Intown neighborhoods didn’t always have a lot of luxury houses, over the past few years, there have been more high-quality homes built with upscale finishes and attention to details like never before.
Rogers advised potential homebuyers to take advantage of the current market conditions. “Buying conditions have rarely, if ever, been better, but as the market continues to stabilize I expect interest rates to increase and prices to follow,” he said. “Consumers’ purchasing power is at an all time high with rates and home prices at their respective bottoms. Serious buyers should not miss this unique opportunity to acquire the home they have always wanted.”