Construction Is Booming – Get Them While You Can
New Homes in Atlanta
By Kevin Forest Moreau
As the economy continues to recover from the effects of achallenging recession, there are promising signs on the horizon for those looking to buy a home in the Atlanta area. That’s especially true if you’re searching for a newly constructed home.
You might think that builders would be reluctant to start building new homes in such a fluid environment, and that has been the case in the past couple of years, as the number of new homes dropped. But the truth is, home construction in Atlanta is currently on the rise. Last year, Atlanta ranked among Forbes’ and the Atlantic Cities’ top 10 cities with the most new home construction.
And that trend translates to more sales. “In January, closings on new homes were up almost 50 percent over last year,” says Steve Palm, president of SmartNumbers, which provides statistics and analysis for real estate professionals. What’s more, he says, permits for new construction “were up 67 percent in February, and that should continue. That’s pretty significant.”
Supply and DemandThe reasons for this promising trend are simple. As interest rates remain low in an effort to stimulate growth, potential buyers begin to feel more confident in the market.
“When the market reset in 2008, many families reevaluated what they really needed,” says Melanie Burruss, a sales agent for local home builder Rockhaven Homes. “But you still have families who have financial resources and want to live in town. Rates are still low, and families are growing and want bigger houses.”
That leads to buyers looking for good homes at good prices, and they’re snatching up new homes just as quickly as they’re built.
“The months supply of homes”—the number of months it would take for all homes on the market to sell based on current sales volume—“is at 2.9, which has never happened before,” says Joe Kerley, chief financial officer of Kerley Family Homes. The average figure is closer to four or five months, which means that demand is outstripping supply.
That’s because there are still less new homes available for sale than there were when Atlanta’s market was more robust.
“The main thing right now is lack of inventory,” says Kerley. As long as that remains the case, “There’s going to be a frenzy on buying houses. In some of our subdivisions, we’re getting multiple offers on multiple houses. Right now, if you can get a house built for a good price, it’ll sell.”
Location, Location, LocationFortunately for new residents and homebuyers, affordable new homes are presently available throughout metro Atlanta.
And that includes the most popular areas. “Almost 75 percent of all new construction is in the northern corridor of Cobb, Gwinnett, Forsyth and North Fulton,” Palm says.
Kerley Family Homes, which offers homes from the $120s to the $300s, had already closed on 75 homes for the year by the beginning of April. The company is currently building homes in communities across the metro area, including Pine Grove in Fulton County, Manous Manor in Cherokee County, and McEver Woods, Oak Crest, Summit Village, Summer Springs, Tate Creek Estates, Walden Crossing and Whispering Lake in Cobb County.
Brock Built, another Atlanta-area builder, is developing new homes and communities across the metro area, including Glenaire in DeKalb County, with Craftsman-style homes from the $280s to the $350s, and Oakhurst in Cherokee County, with homes starting in the mid $200s. It’s also currently selling new homes in the existing Manget community in Marietta, ranging from the $280s to the $450s.
Rockhaven Homes, a builder of luxury custom homes, has properties available in Brookhaven, Buckhead, Dunwoody, Chastain Park and Sandy Springs. Prices range from the $400s to $1.8 million, in areas where comparable homes can go for much higher, according to Burruss.
Rockhaven is poised for a breakout 2013, she adds, which she attributes to the builder being very selective about the neighborhoods in which it builds.
“Honestly,” says Burruss, “it’s location, location, location. We were very precise about where we wanted to execute when we started.”
Builders are also committed to offering value, which has added appeal in the current economy. Kerley points to his company’s starter homes in the low $100s. And Rockhaven works with its vendors to keep prices low, Burruss says, so that it can keep its home prices more attractive to buyers.
Get While the Getting's GoodThere are many more builders working on or selling homes across the region, and the market is even attracting new players. Earlier this year, Houston-based LGI Homes announced plans to expand into Atlanta, and with Builder Magazine ranking the city a top 5 market for future home growth, more companies are following suit.
But as with any growing market, prices won’t remain at their current levels forever.
“The issue we’re going to run into soon is lot supply,” says Kerley, noting that in many cases builders are working on pre-existing lots. “In certain parts of West and East Cobb, the existing lots just aren’t there anymore. Once builders start developing new lots again, the price of developing and the price of homes will go up.”
Additionally, “We’ve already seen situations where people paid too much for land or lots,” Palm says, noting that those costs will inevitably be passed on to homebuyers.
For now, however, if you’re in the market for a new home in the Atlanta area, there are plenty of options available, and at reasonable prices to boot. Happy hunting!
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Kerley Family Homes