By Charlotte Sears
Coldwell Banker Residential Brokerage
What is luxury? In real estate, it can mean many different things – size, space, amenities, features or finishes. Luxury housing in Atlanta is defined by all of those, plus a few characteristics rather unique to our market.
Though it may seem like an oxymoron, one of the most distinctive features of Atlanta’s luxury real estate market is that it’s affordable. A home buyer in the Atlanta metro can get a lot more for their money – at all price points – than in other major metropolitan areas.
A 2014 report by Slate calculated the number of square feet you could get for $1 million in 39 cities. In San Francisco, the city with the highest cost-per-square-foot, $1 million netted you slightly more than 1,500 square feet. For the same money, you could get 2,198 square feet in Washington, D.C., 3,472 square feet in Seattle, around 5,000 square feet in Denver and 5,291 in Miami. Here in Atlanta, though, your $1 million could get you a whopping 6,849 square feet.
Not all luxury homebuyers care about square footage, though. Luckily, the other thing the Atlanta luxury market offers that many others don’t is options. Some buyers may be looking for a home on a large lot, for privacy and quiet. Others might need space for horses, or want a lakefront property with a boat dock. And for some, the ultimate luxury is to have everything taken care of, in a 24-hour concierge high-rise condominium with spectacular city views. Atlanta has it all, in just about every part of town.
And Atlanta’s relative affordability creates yet another option – the option to own multiple homes. Some Atlanta luxury home buyers don’t want to settle for the house on the lake or the penthouse in the city – they want it all. Our comparably lower housing costs make it possible for them to enjoy both the lock-and-leave convenience of urban high-rise living and the year-round vacation lifestyle of a lakefront or golf-course community property.
That gives you a little idea of what and why people are buying in the Atlanta luxury real estate market. Now, let’s take a look at the “how much.” Atlanta’s luxury residential real estate market – defined here as single-family homes, condos and townhomes in the $1 million and up price range – is showing stability after years of struggle. The latest market data* reveals rising prices, steady inventory and increasing sales volume.
Last August saw 55 sales of luxury properties, about even with the 59 sales in August 2013. This August saw a big jump, though, with 94 luxury sales. August traditionally sees a drop in home sales overall, following the peak summer months of May through July. That has grown significantly over the past three years as well – 222 luxury sales in that time period in 2013, 260 in 2014 and 306 in 2015.
In fact, year-to-date August 2015 sales of properties selling for $1 million or more are running nearly 32% ahead of year-to-date August 2014.
Prices have also been trending upwards, with the average sales price in August up 8.4% over August 2014 and at the highest level compared to August 2014 and August 2013. And sellers are getting closer to their asking prices, with the August 2015 selling price versus listing price ratio at 95.3%, up from 94.4% in August 2014 and 93.4% in August 2013.
On the other hand, inventory levels and days on the market are also up a bit, which favors buyers. The Atlanta area currently has 11.7 months of luxury inventory (meaning it would take 11.7 months to sell out of the existing supply of homes for sale) – above the 6 months that typically indicates a balanced market, but well below the nearly four years of inventory we had during the worst of the recession.
There is no way to predict if these trends will continue and Atlanta’s luxury real estate market will keep growing, but we can look at some factors that might influence it.
Atlanta continues to attract corporations to relocate their headquarters here, including major players like Mercedes-Benz and State Farm. And our movie and television industry is thriving, having become the preeminent filming location in the South. Business growth like this brings a lot of new executives to the area, many of whom will purchase high-end residences.
Additionally, Atlanta is predicted to reach a population of 8 million by 2024 – substantial growth in less than a decade, and one that could fuel rising housing demand at all price-points.
Job and population growth are just two areas that could impact the market – interest rates and other unforeseen economic factors also play a role. For the time being, though, Atlanta remains a very attractive option for luxury home buyers.
*Based on statistics for residential single family, condominium and townhouse properties in Cherokee, Clayton, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett and Paulding counties at prices of $1 million and above as reported by FMLS on September 29, 2015, for the period of September 1, 2012-August 31, 2015.