The list of cities that have been truly dominant in new construction gains in recent months and years is a short one. But that list includes Atlanta, which ranks fourth among U.S. cities with the most new-home development, according to a recent Realtor.com census data study. The number of building permits rose by 19 percent since this time last year, according the data cited in the study. And the Peachtree State is ripe for even more new home construction. What is it about Atlanta that makes it such an attractive place to build and sell new homes—and what should agents know about how to thrive in the new-home market? We spoke with expert sources in Atlanta’s real estate and development industries to get their insights.
Where the action is
Land, relatively cheap labor and a loosening regulatory climate have sweetened the deal for building in the South, especially in major metropolitan areas. And the suburbs of South Atlanta in particular are a builder’s dream. Housing starts increased by 13.8 percent, to 2,048 units in this area, according to Metrostudy. Lots of land and cheaper home prices are a major selling point.
But in all directions, it seems, hotspots for new development abound. “There is a huge amount of new construction going on in my neighborhood, Ashford Park, in Brookhaven and in surrounding neighborhoods,” said Becky Morris of the Morris Raney Real Estate Team at Beacham & Company, Realtors. “All of the areas around Atlanta’s beltline are hot right now. The beltline has been a driving force for new development. As the beltline expands, the development follows.”
RE/MAX Around Atlanta puts a heavy focus on new development—so much so that it retains its own builder responsible for designing and building custom homes for clients. Currently, RE/MAX Around Atlanta’s Lisa Scott is involved with a project in Mabry Woods in Sandy Springs developed by EdgeLine. She said the most challenging piece of this new development puzzle is finding land. “People don’t want to spend a lot of time in their cars. With the lack of land for development along the highways, tear downs are a big part of home buying in and around Atlanta.”
But as noted by Sean Clancy, VP of Sales for Pulte Group’s Georgia Division, people in the market for a home still want what they’ve always wanted in a location: To be near good schools and accessible to jobs, shopping and entertainment.
What buyers are looking for
Some things buyers are looking for aren’t as obvious as location. Research can be central to assessing where demand is headed, according to Engel & Völkers Atlanta CEO Christa Huffstickler. Extensive study of what condo buyers are looking for helped lead to a partnership with Selig Development to sell units at 40 West 12th, a 73-unit, high-rise condo development in Midtown. “The development team spent a year analyzing consumer trends, understanding where the void in the market was and planned a new project to fit this need.”
Builders are catering to the demands of home buyers who are increasingly looking for modern homes. Both single-family homes and townhomes are on the rise, according to Morris. “Townhomes with wall-to-ceiling windows and rooftop terraces are especially popular. Luxury condominiums like One Museum Place and The Charles are great examples of modern luxury developments.”
Because builders are paying attention to what home buyers are clamoring for, buyer activity is up over last year, according to Clancy “It’s an exciting time. There are a lot of things changing in how people are living and choices they are making.”
Older buyers are having their moment
Buyers over 55 are coming on strong in 2019. “This particular segment of the population is underserved, especially inside the perimeter,” according to Morris. “There is a great opportunity for a builder to develop an active adult community with walkable amenities, healthy dining and spa-like exercise facilities, including yoga.”
Stocks have been soaring, with the S&P 500 closing at record highs several times in April. This can make a difference for older homebuyers, whose income often comes from their investments in the market. Clancy believes this age group has access to funds that have been growing over the last few years. “This group has buying power, assets and are typically selling property and reinvesting equity.”
Buyers in communities developed by Del Webb, Pulte Group’s 55+ brand, tend to shy away from homes that require a lot of work, according to Clancy. “They’re choosing homes that require less maintenance and upkeep, so they can live their lives.”
According to Morris, one reason buyers have soured on maintaining older homes could have to do with what they’re watching on TV. “HGTV and DIY networks have spoiled buyers. They don’t have the money, time or interest in renovating,” Morris said. “They want to bring their toothbrush and move right in.”
Another project unique to the needs of this particular age group is Chastain East. This single-family community was planned well in advance to cater to the downsizer, Hoffstickler explained. “These are buyers who didn’t want to go into a condo or townhome, but didn’t have interest in maintaining a yard or a huge house. And the project is seeing a lot of success. We are seeing a trend toward development in the West Side of Atlanta and Chamblee, with its neat art and culture is also on everyone’s radar,” added Hoffstickler.
Buyers know what they want… if they can afford it
As our expert sources point out, today’s home buyer is educated on new home trends and their design desires are specific. Updated interior finishes are in demand, as well as technological features like thermostats designed to conserve energy and locking systems that can be operated from a mobile app.
All those features cost money, though—sometimes enough that would-be buyers of new homes have ended up priced out. “We are seeing people who really want new construction, but can’t find affordable product, so they are going into the resale market by default,” Hoffstickler said. “Our biggest challenge in the industry right now is providing affordable new-construction homes.”
Factors like when the new house will be ready, location and overall value are playing into the new construction versus resale debate. Ultimately, it comes down to meeting the demands and needs of the buyer.
Constructing Relationships between Agents & Builders
To meet the demands of buyers, building a solid working relationship between builders and agents can be as important as the bricks and mortar used to build a home. Clancy said three-quarters of homes sold by the Pulte Group are sold in partnership with Realtors. Treating agents as partners is the key, he said. “Agents are in homes every day and see what other builders are offering. They know the trends and what buyers like,” said Morris. She believes agents need to be involved from the very beginning, along with decorators, to avoid costly mistakes that even savvy developers may make without the input of an experienced team of agents working with them.
Sometimes, the stakes are even higher than getting some details wrong, said Scott. “It takes so much time when they are developing sewer, power, cable, clearing land, making roads. Then they start breaking ground and the market has changed. [Developers] need to be proactive and plan 6-12 months out.” she said. “If they don’t communicate [with agents], price points may not be where they need to be, finishes or floor plans may not be what the buyers are demanding.”
Communication is vital for home building and buying to work well. “The most productive thing that these two industries could do is communicate as much as possible,” said Hoffstickler. “It is very important for builders and developers to consult with knowledgeable real estate professionals who have a keen boots-on-the-ground perspective about what buyers want.”