Strong Market for New Homes
Builders Focusing on In-Demand Northern Suburbs
By Larry Anderson
There’s no shortage of choices when seeking to buy a home in theAtlanta area, and more options become available every day, courtesy of a thriving home construction market. The strength of Atlanta’s new home market is reflected by a 4.6 percent annual appreciation for new homes (compared to the national rate of 2.9 percent). Home construction has increased in 2016, but is still below the boom years in the early 2000s.
Most of Atlanta’s new home construction is focused in the northern suburbs, outside the perimeter, especially along an arc running through Marietta, Alpharetta, Duluth, Roswell and Lawrenceville. New homes today are typically more expensive and built in higher-income neighborhoods. Aaron Terrazas, senior economist for Zillow, a real estate website, says the average home price (including new and used) is $246,000 in counties that have the highest density of new construction, and only $109,000 in areas with lower density of new construction.
Higher-end homes are the norm today because of the economics of land and capital, says Terrazas. Land is expensive, especially in high-growth areas, so builders tend to build larger homes to help them recover land costs.
‘Town Center’ Type Developments
Outlying locations are still popular, but there is also a trend toward people wanting more convenience in their lives. Serving the demand are “town center” developments that offer new homes located near commercial areas and employment centers. Increasingly, people want to live near where they work, but don’t want to compromise on amenities, living space, or good schools. They want to be able to walk to shops and restaurants, and not have to be tied down with a big yard to take care of.
New homes in the Village of Belmont in central Smyrna appeal to buyers who want a more urban, walkable setting. The higher-density development offers three types of smaller houses and lots, with single-family detached homes that are more “vertical” in design. Pricing in the David Weekley Homes development is from the high $200s to the $400s.
David Weekley Homes is also planning a similar development, called Broadview Place, in Buckhead. The development is within walking distance of the Lindbergh MARTA station. Features are smaller lots, vertical homes and home maintenance provided by a homeowner’s association (HOA). Sales are opening this fall, from the high-$400s and low-$500s up to the $700s, with seven different floor plans on 95 lots. The variety of plans and lot sizes ensures a breadth of price ranges
Bridging the Economic Gap
Newly built homes are more expensive than older homes, and the gap has increased in recent years—it’s currently around 37 percent in the South, according to Zillow. David Gernatt, product manager in Atlanta for David Weekley Homes, points out that considering the extra cost of maintaining an older home can fill the gap. And do you really want to spend the weekend dealing with a broken appliance?
Energy efficiency is another element in the economics of buying a new home. David Weekley’s homes have higher energy ratings that yield about 42 percent savings in energy costs compared to a home built just six years ago, says Gernatt. Factoring in the cost savings can also help close the economic gap.
David Weekley has been active in Atlanta since 1999, and builds homes from the high $200s to more than $800,000, and everything in between. Their core counties are Cobb, Cherokee, North Gwinnett, North Fulton and Forsyth.
The Reserve in Old Atlanta is a David Weekley development in south Forsyth County, backing up to the St. Marlo Country Club, and in the Lambert High School District. The tech boom has yielded plenty of new jobs in the area. The gated community for upscale suburban families offers lots of amenities and prices from the $600s to over $800,000.
Submarkets Expanding, Too
Because Atlanta has no natural boundaries to stop geographic growth, new home submarkets have continued to expand into areas farther from the Atlanta city center but within proximity to regional employment areas.
Castleberry Heights is a D.R. Horton community with resort-style amenities, The Forsyth County location, close to Lake Lanier, also offers plentiful shopping in Cumming, proximity to Highway 400, and highly ranked schools. Houses are priced from $308,900 to $382,990.
Heritage Club is an Express Homes (D.R. Horton) community in Dallas, Ga., offering affordable prices in a family-friendly community. Prices are $159,990 to $205,990, and features include a clubhouse, pool, tennis courts and a playground.
Tom Hill, East Region President, says D.R. Horton offers several brands of homes for a range of buyers, from first-time buyers (Express Homes) to move-up and luxury buyers (D.R. Horton and Emerald Homes) and active adult buyers (Freedom Homes). In Atlanta, D.R. Horton has been expanding its Express communities, offering quality homes at affordable prices. D.R. Horton closed 2,359 homes in 2015 (including all brands), around four times as many as in 2012.
CalAtlantic Offers 22 Communities
Ryland Homes has been an Atlanta area builder for 30 years. The company merged in October 2015 to become part of CalAtlantic Homes, headquartered in Irvine, Calif. CalAtlantic currently sells out of 22 communities in the Atlanta area. Historically, Ryland was an entry-level home builder, but CalAtlantic now serves the up-market with homes from $300,000 to $435,000, typical suburban move-up homes.
CalAtlantic Homes developments in Atlanta include Towns at Breton Ridge, on Herodian Way, just south of Windy Hill Road and near the new Braves Stadium in Cobb County. The town home community has units that are 2,500 to 3,500 square feet, starting in the $360s, with some deliveries in the low-$500s. A second development, Towns at Druid Hills on Druid Hill Road, has townhomes starting in the $470s to the $500s, with square footage between 2,500 to 3,500. Ed Woodland, Atlanta President for CalAtlantic Homes, says these homes are a smaller part of the company’s business, which is mostly larger homes north of the city.
A more typical CalAtlantic subdivision is Ashbury Park in Gwinnett County, in the Hamilton Mill area, not far from I-285 and I-985. A lower-priced option is a 2,400-square-foot home in the $300s, and there are also choices approaching 4,000 square feet and $500,000. The large community includes a clubhouse, Olympic size pool, walking trails and a children’s playground.
Arbors at Lake View in South Forsyth, off Aaron Sosebee Road, is a suburban neighborhood of two-level homes starting in the low-$300s (2,400 square feet) and going up to the mid-$400s (3,800 square feet). There are multiple home choices and amenities including a clubhouse and Olympic size pool with a water slide.
Strong Fundamentals, Healthy Market
Atlanta’s economic fundamentals are among the best in the country, including job and wage growth and employment stability. It’s great news for the new home market, and lots of building activity ensures plentiful choices for any newcomer. Consumers today are feeling more secure and are therefore willing to take on more risk for a larger home. Mortgage rates are attractive – still in the mid-3s. Down payments may be as low as 3 percent. No wonder Atlanta is the top relocation market in the Southeast.