The mid-year intown condo report published by consulting firm Haddow and Company has real estate folks in Atlanta smiling for a change. That's because despite the lingering economic lag, units are still selling. Here's the breakdown.
- The number of units sold so far this year beats the first half of 2010, 482 to 463 units respectively.
- The sweet spot for sales seems to be units priced under $300,000.
- In 2007, when the real estate bubble began its burst, intown Atlanta had 7,252 unsold units. As of now, that number's dwindled down to 2,369.
Here's the not so good news, at least for sellers and developers. Even though condos are selling, their prices have come down 30-40% from what they were during the height of the bubble. Case in point: 10 Terminus Place, a project in Buckhead developed by Cousins Properties. With prices reduced by up to 35%, Cousins was able to whittle down the building's inventory by 110 units over a one year period, selling out earlier this year.
Even though supply is finally coming down, don't expect developers to release a batch of shiny new condominium renderings any time soon. The development type du jour is apartments. Upscale rental projects have been announced for Midtown, Buckhead, and the Emory area, catering to lukewarm consumers' confidence. But I'm more than willing to bet some of these projects will be converted to condos when the market allows. Peachtree Lofts, Metropolis, the Mayfair Towers, and Paramount at Buckhead are just some of the buildings that started life as rentals.
In addition to running his esteemed consulting company, David Haddow was one of my real estate professors in college. One day he handed out this graph that illustrates the recent history of Atlanta's construction cycles. Honestly, it's one of the reasons I chose to stick with real estate as a major, even as the market came crashing down. That is, what we're seeing now has happened before (if not quite as severely), and we shouldn't be planning real estate's funeral just yet.