Intown condominiums and townhomes continue to be a hot ticket for homebuyers. The current limited inventory and increase in prices, however, have slowed things down a bit. Still, a few projects are coming online that could help open things up again.
“The Midtown and Intown markets remain hot for new construction condominium and townhome sales,” said Anne Schwall, Vice President, Atlanta Fine Homes Developer Services Division. “While condo inventory remains extremely low with only a handful of new projects on the horizon, the demand for new condos is still strong.”
For the first quarter 2019, the absorption rate for pending new construction condo inventory has averaged over 20 percent for the quarter, she said. New inventory in the area includes J5 Condos, at Juniper and Fifth Streets in Midtown, and Airline Condominiums near Krog Street Market.
“Townhome builders and developers have not been hindered with the same financing constraints as condo projects and have been more successful in bringing new townhome inventory to the Intown markets,” Schwall explained. “While townhome inventory is more plentiful, absorption rate remains high. In the first quarter, the absorption rate for new townhome inventory averaged 18 percent.”
“Inventory levels of townhomes and condos are on the rise, especially in the higher priced home market — $600,000 and up,” said Christa Huffstickler, President & CEO, Engel & Völkers Atlanta. “Now that spring is upon us and the market is kicked into high gear, it will be interesting to see if all of the newly constructed attached home product will become absorbed as quickly as the pent-up demand from the market is forecasted to do so.”
At the same time, condo inventory in Midtown increased 180 percent on a year-over-year basis from 1.1 months in March 2018 to 3.2 months in March 2019. She noted that while the market is still tight, “…it’s promising news for buyers who may have been waiting to make their move.” She added that, in Buckhead, the months of inventory increased 163.5 percent year over year from 1.6 months to 4.2 months.
“The demand is still up, but there’s still a real lack of options,” said Karen Rodriguez, Founder/Associate Broker Group Kora | Berkshire Hathaway. “There are many buyers who are still sitting on the sidelines.” She noted that while there’s been a correction in the market, “…2019 is not looking as bad as some were predicting in the fourth quarter of last year when things started to slow down.”
Lori Lane, Sr. Vice President & Managing Broker, Berkshire Hathaway HomeServices, New Homes Division, Luxury Collection Marketing and City Haus Developer Solutions, said that she also sees the demand remaining high for condos and townhomes, while the shortage of new inventory continues.
“There are a number of new construction condominiums under construction or in early development stages Intown,” Lane said. “Once these projects start delivering, we’ll see a number of existing condo owners choose to upgrade to a newer product. This could potentially free up some resale inventory for entry level millennial buyers.”
The issue of affordability
Schwall said that, similar to the lack of Intown new construction condo inventory, Buckhead new condo inventory has hit an all-time low. One new condo project in Buckhead, The Charles, is now over 75 percent under contract, and a few lingering homes remain at the rebranded Waldorf Astoria, previously known as The Residences at Mandarin Oriental Atlanta.
“Currently, only 20 new condos are available on the market,” she said. “While Buckhead new townhome inventory is more prevalent, inventory has dropped by 50 percent since first quarter last year while sales for the first quarter in 2019 have increased by 44 percent indicating demand for new townhomes is outpacing available supply.”
As townhome sites in the Intown markets become scarcer and construction costs continue to rise, sales prices are also increasing. “New townhome inventory on the market averages over $650,000 — a rise of over $100,000 from new townhomes on the market a year ago,” Schwall reported. The affordability issue of Intown living is challenging builders and developers to find innovative ways to offer new, efficient housing options to meet the need for attainably priced homes, she said.
“Demand is extremely high for an affordable priced product, defined as less than $600,000,” Huffstickler said, adding that a few months’ supply for attached product is well below stabilized market conditions for homes priced below $600,000. “It’s a buyer’s market for $600,000 and above, and a seller’s market for $600,000 and below.”
She said that the conversion products of District Lofts and Harper on Piedmont are providing the correctly priced product to fill the void that the market is experiencing.
Harper on Piedmont is a new condo conversion on the border of Downtown, Midtown and Old Fourth Ward, offering updated interiors and refined amenities at a price point that is amazing for the area. Buyers will benefit from its unique proximity to three of Atlanta’s most popular neighborhoods, with the ability to enjoy a sophisticated and connected lifestyle without borders, she added.
District Lofts, located in premier Atlantic Station, is another recent condo conversion. The West Midtown neighborhood is perfect for the social buyer looking to get out and experience top retail and dining. The condos are newly renovated with updated finishes and mirror an urban loft design, in addition to in-home tech. Homes in both communities are priced between $250,000 and $600,000.
Lane noted that another affordable condo project, Airline O4W, is located in the heart of the historic Old Fourth Ward neighborhood, steps from the Eastside Beltline Trail and Krog Street Market. Airline O4W offers 29 one- and two-bedroom condos from the $300,000s. Floor plans include the latest in modern conveniences and a variety of amenities, such as an indoor/outdoor rooftop terrace, a dog washing station, bike storage and parking and Internet included.
Luxury and location
“Chateau des Peres has been a fun project,” Rodriguez said. “My developer/client purchased the entire 40th floor in an older Midtown building and is in the process of building out three very modern penthouses.” Once the first home was completed, it — and the unfinished second home — were sold. “We’re now finishing up the third and largest penthouse, and we’ll be releasing it to the market soon,” she said.
Since the building is older, Rodriguez said, this creative option lets a prospective buyer take advantage of lower pricing, while being able to move in immediately and live in a brand-new construction 40th floor penthouse. “The finishes, like sleek European Leicht kitchens with large waterfall islands, quartz countertops and Italian closet buildouts, are ones that you would only find in properties nearly double the price, due to building costs,” she said. “The response was incredible. I wish we had more to sell!”
40 West 12th is a luxury condo building located in Midtown’s core, part of a comprehensive mixed-use project featuring office, retail, dining and hospitality. Huffstickler said that residents of the condo will be able to take advantage of a walkable, connected community and in-town lifestyle. Prices start at $500,000.
“We have also taken over sales and marketing for the newly rebranded, ultra-luxe Residences at Waldorf Astoria, Atlanta,” said Huffstickler. Buyers enjoy full-floor and half-floor homes, expansive views and opulent interior finishes with access to elite-level concierge service and other amenities provided by the Waldorf Astoria, which was formerly the Mandarin Oriental.
“In August of last year, we were fortunate to finish up the new construction sales at the Mandarin Oriental on a high note of over $83 million in sales with numerous design and marketing awards, and achieving the highest Atlanta condo sale for 2016, 2017 and 2018,” Rodriguez said.
“As much as we loved the Mandarin Oriental brand, we were thrilled about the re-brand to Waldorf Astoria,” she said. Group Kora | Berkshire Hathaway still represents three resale units in the building, including one on the top floor, an 8,000-square-foot, two-story penthouse shell listed at about $6.5 million.
Located in Midtown on 14th Street, No2 Opus Place is Atlanta’s tallest residential tower; 186 condominiums are housed in a 54-story high rise. Lane said that the all-new homes boast endless city views and top-of-the-line finishes and features. The Opus Club offers private amenities that include a spa and wellness haven, artful experiences and Mozart’s Club Level. Pricing ranges from the $600,000s to $12 million.
Closings at The Charles are scheduled to begin in August of this year, Schwall said. “While our penthouses are sold out, we have a limited number of two- and three-bedroom homes ranging from 2,460 to 2,867 square feet,” she added. Each floor plan boasts expansive great rooms providing well-proportioned entertaining space, with folding glass NanaWall doors enabling a seamless transition between indoor and outdoor living.
Other features at the Charles include sweeping views of Buckhead and Downtown and a 14,000 square foot, elevated amenity terrace with an outdoor deck that features an infinity pool, green space and manicured gardens. All this is in close proximity to Buckhead Atlanta and walkable to shopping, dining and entertainment at Buckhead Village.
Who’s buying?
Intown attached housing allows homeowners a walkable, lock-and-leave lifestyle that is attractive to many people.
“The walkability of Intown living appeals to both the millennials and retirees,” Lane said. “All of the dining, culture and entertainment one could need is within reach. The easy, lock-and-leave lifestyle continues to also be a driving force behind condo and townhome living.”
She noted that millennials and retirees don’t want to worry about yardwork, roof repairs or other home care issues. And a number of upcoming projects are full amenities, which adds to the appeal of attached living.
“We’ve observed a wide demographic range interested in condos and townhomes Intown, and it’s because this lifestyle appeals to people from millennials to baby boomers looking for style, vibrancy and convenience,” Huffstickler said. “Of course, young professionals are seeking homes near business centers like Midtown with access to transit and a shorter commute while also being close to restaurants and popular Intown destinations.”
She stressed that condos and townhomes are the best products for a walkable, connected way of life, and can be much more affordable than a single-family home for a first-time buyer.
“On the flip side, empty nesters and retirees are ready to let home maintenance go and live in a more manageable product, like a townhome, in a close-knit neighborhood near shops, dining and social experiences,” she said.
Throughout the age spectrum, Huffstickler and her team see a high demand for the latest design trends, like industrial, loft-style features and unique, ‘white glove’ amenities.
“Urban dwellers don’t want to sacrifice outdoor space, so developers are installing rooftop gardens and pet clubs, and we’re elevating fitness centers with Peloton bikes and group fitness classes,” she said. “There’s a real sense of community in attached home communities, and it’s a really active, programmed lifestyle which is highly appealing to multiple groups.”
