Resales Rule Atlanta's Luxury Condo Market
Selig Development Co. has not even opened a sales office for 40 West 12th, but the firm already has pre-sold six units in its planned luxury condo project.
Turns out, Selig's project, which is a part of a larger mixed-use development in Midtown that includes the future home for a regional Google office, is one of the exceptions when it comes to demand for new condominium units in Atlanta.
Instead, resales have mainly ruled the day.
Atlanta's condo market saw prices rise, but the total number of sales declined from the previous year. The average price for condo sales rose 6.5% to $331K/per unit, while the total volume of condo sales inside Interstate 285 fell from 3,900 units in 2018 to 3,600 units in 2019, according to Haddow & Co.
“All in all, the market, I guess you can say, is stuck in neutral,” Haddow & Co. Vice President Ladson Haddow said.
Some luxury resales are breaking records. Thus far, Loudermilk Cos.' The Charles condo in Buckhead, one of a few luxury condo projects under development, is selling for an average of $725/SF per unit, the highest price point for new condo sales in Atlanta.
Luxury resales have averaged nearly $1K/SF, according to Haddow & Co., while a 9,800 SF penthouse at the St. Regis resold for $15.9M, the highest price ever paid for a condo in Atlanta, according to Curbed.
One big reason resales have been strong on the luxury side: They have often been held by people stuck with them after the Great Recession, who have since renovated the units.
“We've recovered since the recession, and as we recovered, these units have [been] renovated and can compete with the new construction,” EXP Realty real estate agent Collette McDonald said. McDonald has been featured on a number of HGTV shows, including Designed To Sell and Bang For Your Buck.
Buyers for the luxury market have been a motley crew of out-of-town investors, empty nesters from Atlanta and high net worth individuals, including people here for the lucrative Georgia film tax credit.
"The pattern that I'm seeing is a lot of the homeowners currently in the suburbs, they are downsizing if the kids are out of the home. They're looking to sell those big properties, come into town and be able to take the elevator down and walk to restaurants,” Harry Norman Realtors associate broker Anthony Acosta said.
For many, established luxury condos are more attractive than new construction, Acosta said, like properties such as The Sovereign and the Waldorf Astoria Atlanta Buckhead, both in Buckhead.
Selig Development Chief Operating Officer Steve Baile said even at 40 West 12th, a 64-unit project, he is seeing both empty nesters and buyers from outside Atlanta looking for a second home. Selig's average price point is well into the luxury realm at $1.5M per unit.
“There's definitely a move-up market in Midtown,” he said.
Engel & Volkers Managing Broker Christa Huffstickler, who also is marketing 40 West 12th for Selig, said buyers from cities like New York and San Francisco see Atlanta's luxury market as a bargain as well.
"Coming here and being able to live above the Waldorf Astoria for $2M is still a value,” she said.