Atlanta Condos
Throughout metro Atlanta the city's condominium market is becoming oversupplied. Atlanta has almost one-year's supply of condos available. In the one million and up range there is a three-year supply for sale (not including condominiums that are in the process of construction or planning for future development.) That is significantly above the national average supply of condos, which was 4.8 months for 2005 and has ranged from six to 8.6 months in 2006, according to the National Association of Realtors.
The growing supply of existing Atlanta condos for sale, joined with the thousands of others being built, conveys that many Atlanta who already own condos risk losing money if they decide to sell, whether they are investors attempting to sell rental property or condo residents looking for a new home. The Atlanta Business Chronicle recently reviewed data from First Multiple Listing Service, the National Association of Realtors and Reis Inc., a commercial real estate research firm. The data revealed that there is a large supply of Atlanta condos for sale. It has also been discovered that both older and newer condos have relatively high percentage of units for sale, which points to a surplus. In the Mean time, Atlanta is also having an abundance of condo conversions.
The metro area placed fifth nationwide in the number of apartment units transformed to condos in the second quarter. The prices have already begun to slip. Only five metro areas had a worse condo price decline than Atlanta in the second quarter, consistent with data from the National Association of Realtors. Atlanta condos prices were down 5.1 percent in the second quarter compared with a year prior. Regardless of the decrease, condo developers keep pushing ahead. Atlanta's so called “condo king“, Jim Borders, maintains a positive attitude about the condo market and is adamant that there is no avalanche of supply because he is aware of "how hard it is to get a shovel in the ground where you have increasing land prices, increasing construction costs and difficulty with development."
Novare plans The Atlantic in Atlantic Station, The Roxy in Buckhead and 3360, a shared project with Atlanta's Post Properties Inc., Pope & Land Enterprises Inc., and Duke Realty Corp. However, Mark Randall of Wood Partners LLC said that developers are tailing the market dynamics. In addition, when asked if they would be taking a more wary tactic, Randall said yes. He also noted that if there is the right project in the right location then it means there is still definitely a market for it.
The large institutional banks and investors "are pulling back in a big, big way" when it comes to the Atlanta condos financing, regional development partner of the Southeast for Lane Co., an Atlanta-based company that builds and manages condos and apartments. Banks once would finance condo projects without the need of developers to have pre-sales, nevertheless, now banks require 50 percent to 65 percent pre-sales before they will lend for construction.
