The Unites States Census Bureau recently released updated population estimates for the first time since 2010, and the results were quite surprising.  Despite signs of economic recovery and nearly two years after the technical end of the recession, a reverse trend has developed.  The exodus of buyers to the outlying suburbs where homes are larger is over.  In fact, the annual rate of growth in American cities and surrounding urban areas has now surpassed that of the suburbs for the first time in over 20 years. 

This decrease in population in outlying areas or “Exurbs” is due to various factors.  For one, the substantial loss in home values in these areas has buyers looking for property with increased price stabilization and higher short-term ROI potential.  With foreclosure inventory nearing the bottom within the I-285 corridor, market sales are on the rise and taking prices along for the ride.  Energy costs have a direct impact on this new trend as well.  The high cost of gasoline discourages long commutes, and larger suburban homes generally come with higher heating and cooling costs. Finally, young buyers prefer an urban location, and with the emergence of the “Echo Boomers” as the next wave of new home purchasers, this trend is likely to continue.

“The heyday of exurbs may well be behind us,” Yale University economist Robert J. Shiller said.  Shiller, co-creator of the Standard & Poor’s housing index, is perhaps best known for identifying the risks of a U.S. housing bubble before it actually burst in 2006-2007.  Examining the current market, he believes America is now at a turning point, shifting away from faraway suburbs to cities amid persistently high gas prices.

This re-urbanization is particularly evident in the Atlanta metro area.  For instance, from 2000-2010, Cobb, Fulton, Dekalb and Gwinnett counties added an average of 42,779 people per year, while the counties on the edge of the region added an average of 57,425.  However, from 2010-2011 the close-in counties added 55,168 people while the edge counties added 21,077.  This represents a population increase of 29% for inner counties while the outlying areas saw a 63% decrease.  Last year alone, growth in Fulton and Dekalb counties outpaced Gwinnett and Cobb by 26%

According to Carol Coletta, President of CEOs for Cities, the American Dream with respect to home ownership and the traditional suburban lifestyle is changing.  This conclusion is based on a 30-year study of people between the ages of 25 and 34 showing that they are more likely to live closer to urban centers than generations past.  For example, in 1980 12% of respondents were more likely to live in a city center, compared to 42% in 2010.  If you further refine the sample to include only respondents with a college education, the number jumps to 105% more likely to live in an urban environment.

What does this all mean for Atlanta? 

As data is already suggesting, Atlanta’s real estate recovery will likely occur from the core of the city outward.  This includes increased retail in urban centers to cater to new residents looking for a “walkable” lifestyle.  With increased business activity in these areas, the jobs and people will follow.  Companies making the decision to move their offices are more likely to settle in urban areas to tap into the young talent making their home there.  According to the Federal Reserve Beige Book summary for Atlanta, Commercial Real Estate Brokers continue to report modest improvement in demand, but mostly for Class A space located in urban areas. 

This increase in demand will also cause Atlanta inventory levels to shrink even further.  The glut of excess Intown housing has been replaced by record low inventory with levels for Condos and Townhomes decreasing 37% in the last twelve months.  It’s Economics 101, the increase in demand for urban properties, coupled with shrinking inventory, will cause both sales and prices to rise, further widening the gap between urban vs. exurban pricing and demand.    This is already clear when you look at year-over-year sales prices for attached housing, which has risen by 13% from March 2011.

With sales on the rise and inventory steadily decreasing, urban housing complexes will continue to sell-out.  Many developments are down to their last remaining units or have run out of inventory entirely.  Gallery Residences, Luxe, and Viewpoint have all sold-out and Tribute Lofts are down to only two available units.  Increased competition for remaining units will further spur price recovery and eventually lead to the new construction Atlanta so desperately needs.

What do singles want in a condo?

Many professional singles don’t have time to maintain a home — nor do they need or want all that space. Condos are cozy, they come with maintenance fees that assure that gardens, and roofs get taken care of by other people, and they often have pools, gyms and other amenities geared towards singles. Other singles are not so much busy, but are not inclined to home repairs, they welcome the maintenance provided by condominium complexes.

 “Selling out a community in any economy is a huge feat, but selling out a luxury residential community in one of the most challenging real estate markets of the last century may seem impossible,” said NRT Development Advisors president Brad Horner.  “The success at Gallery Residences is due to targeted positioning and pricing.  With a constant pulse on the latest market data and consumer trends, NRT Development Advisors identified and marketed to Gallery’s target audience and priced each unit appropriately to sell while still maintain the community’s value.”

Gallery Residences’ 203 one-, two- and three-bedroom homes average 1,700 square feet and offer private balconies, floor-to-ceiling windows with views of Downtown Atlanta and Buckhead.  Amenities in the 27-story building include a library, an art gallery with rotating exhibits from local artists, park-like green space with a fireplace and seating areas, and a swimming pool.

1)  Respond in a timely manner. Always answer your phone, respond immediately to texts or emails.  The first responder typically gets the business!

2)  Illustrate that you are the expert.  Share information with clients about prices in a neighborhood or activities in a neighborhood.  Become the “go to” person.

3)  Communicate consistently.  Always touch your client in some form or fashion whether via email, personal note, newsletter or lunch.

If you follow the above you will see results!

What a great time to be a real estate professional! It’s Spring, marketconditions are improving and opportunities are attainable!

I’d like to share the following ideas on ways to make 2012 your best real estate year ever:

Prospecting, Presentation, Pricing and Promotion

Let’s begin with Prospecting:

Focus on proven income-generating activities and multiple prospecting methods to get an appointment every day and keep your pipeline filled with future business.

Presentation:

Put your best foot forward, use the latest available technology to present your brand and your abilities as a real estate professional.

Pricing:

Accurately price every property, repositioning as necessary, to sell homes efficiently in today’s market.

And finally, Promotion:

Take advantage of the industry leading marketing and technology tools. Record a personal video as well as video your listings.  It is proven that agents who invest in themselves and their business generate higher levels of income. Take steps today to make sure you and your listings stand out in a very competitive crowd.

By focusing on the above you will be “in it to win it”, and with that comes more listings, more sales and more money.

1) Don’t overcrowd a room with furniture that is too large for the space; it will only make the room appear small and cramped. However, don’t leave a room too barren either.

2) Get rid of the clutter. Make a house rule that for every new item that comes in, an old one has to leave. One of the major contributors to a cluttered look is having too much furniture or just items need a place to go – decorative baskets can be used to store the loose items, i.e. magazine, remotes, etc.

3) Lighting is important. As it turns out, many  homes are improperly lighted. To remedy the problem, increase the wattage in your lamps and fixtures. Make sure you have three types of lighting: ambient (general or overhead), task (pendant, under-cabinet or reading) and accent (table and wall).

4) Mixing the right accessories can make a room more inviting. When it comes to eye-pleasing accessorizing, odd numbers are preferable, especially three. Rather than lining up a trio of accessories in a row, imagine a triangle and place one object at each point. Scale is important, too, so in your group of three be sure to vary height and width, with the largest item at the back and the smallest in front.

If you wish to sell your home, take time to make it presentable and pleasing.

My philosophy is, you can’t live in a view. Therefore, making sure the space works for you is imperative above all else. Ask yourself, does the home have the necessary storage and size rooms I need? The novelty of a great view will fade over time, but the size of your kitchen and the flow of your space is what you see and live with from the moment you walk through your door. With size in mind, I recommend not going below 50% of what your current space is, if you live in a single family home. Therefore if you have 3000sf home, a 1200sf condo will likely be too much of a downsize for you.

 Here is where my philosophy on condo views developed from: When I first began selling condos 10 years ago, I always thought the higher up you bought the better. However, as I began to speak with more and more clients that lived with very high views. Many began telling me that after three to six months, they stopped noticing the view. The owners explained that they just didn’t enjoy it much in their day-to-day lives unless they had company, but their living space is what they had to live with day-in and day-out.

Oddly enough, the clients that purchased condos with a tree line view that allowed them to see people walking around reported that they stayed engaged with the view and enjoyed it more. They often sit on their terrace and people watch. This is difficult to do if your view is from the 25th floor unless you brought your handy binoculars which for some might sound a little strange?

Therefore, based on my conversations over the years, my recommendation is to be high enough off the street to cut noise, but still able to engage with what is going on around you. Depending on the location, that might be as low as the 4th-5h floor. Since condominiums typically increase about $10,000 for every vertical jump you make, living on a lower floor may mean that you pay less and enjoy more.

The Midtown Alliance, the organization guiding Midtown’s renaissance since the 1970’s, is spearheading a number of new projects, outlined in the link below: 

http://www.midtownalliance.org/Streetscape%20Update.pdf  

One example is the $4.1 million Juniper Street Streetscape project, slated to begin construction in early 2012.  Local planning, architecture, and landscape architecture firm Tunnell-Spangler-Walsh  was retained to design the scheme.  According to details on the firm’s website  “the plan…includes transit improvements, traffic calming, and traffic flow changes that will transform the street from one that repels and divides to one that attracts and connects.”

 (http://www.tunspan.com/cutsheets/urban_streetscapes/Juniper_Street.pdf )

Physical enhancements in connectivity improve resident quality of life, assist in local business attraction and retention, facilitate job creation, and ultimately, drive housing demand.

As a real estate professional, this is great information to share with prospective homebuyers, as investments in the future help us all to focus on the long-term vision, as opposed to short-term economic challenges. 

On another note, yesterday’s Atlanta Real Estate Summit, sponsored by the Atlanta Business Chronicle, The Atlanta Board of Realtors, and RealValuator,  covered lots of territory and at times encouraged and expressed divergent opinions about the state of the national and local housing market.   One thing no one disputed, however, was the continued decrease of in-town new construction housing inventory.  Real estate is not only local, but hyper-local.    

As real estate professionals, it’s our job to stay informed about the conditions in each of the sub-markets in which we operate.  In doing so, we facilitate an informed and confident decision making process for our customers and clients.

Happy Holidays

From the Coldwell Banker
NRT Development Advisors
family to yours

As the holiday season begins, we’d like to take this opportunity to thank everyone for their continued partnership. 

In 2011 NRT Development Advisors achieved sales milestones, received high acclaims for unique marketing tactics and increased its team of sales professionals, and we have  – our clients and partners – to thank for our continued success.

May everyone’s holiday season and the New Year be filled with much joy and happiness.  We look forward to working with you in the coming year and continuing a successful business relationship.