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.

The official drive dates are April 30 – May 7.  Coldwell Banker NRT Development Advisors  is a drop off for the items! Bring your essentials.

This event offers you the chance to see us in action. Open House Weekend is a fantastic way for you to find an approachable, knowledgeable expert that can help you navigate the home purchasing process. Click here to preview our open houses!

Urbanization is closely linked to modernization, industrialization, and the sociological process of rationalization. Urbanization can describe a specific condition at a set time, i.e. the proportion of total population or area in cities or towns, or the term can describe the increase of this proportion over time. So the term urbanization can represent the level of urban relative to overall population, or it can represent the rate at which the urban proportion is increasing.

Urban Land Institute’s “What’s Next? Real Estate in the New Economy” report found that today’s homebuyers want smaller homes in urban areas in order to save time commuting and money on mortgage. This MSN Real Estate article listed highlights from the presentation, including:

• Rising commuting costs, both in money and in time are increasing Americans’ desires to live near restaurants, shops and services. That is especially true of the two largest groups: Generation Y and the baby boomers.
• Gen Y prefers a more urban environment and is willing to sacrifice space for a better location. Plus, lower incomes mean they need to find homes at lower rents and lower mortgage payments.
• Demand for larger homes and apartments will come from intergenerational families, as aging boomers are forced to live with their children or adult children are forced to continue living with parents. Friends and acquaintances also may choose communal living arrangements in larger spaces to save money. 
• More people over 65 will choose to age in place or be forced to move in with relatives. Many of those who are free to move, like their Gen Y counterparts, favor smaller spaces in urban areas.

The National Association of Realtors found similar results with its 2011 Community Preference Survey. More than 58 percent of respondents preferred “a neighborhood with a mix of houses and stores and other businesses within an easy walk,” and 59 percent “would choose a smaller house and lot if it meant a commute time of 20 minutes or less.”

Marsha Cain

Tonya Marlatt

Renata Mellor

Retta Christoforatos

 “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!