MarketNsight recently hosted its MarketWatch Atlanta event releasing data on the state of the Atlanta new homes industry to a crowd of more than 400 builders, developers, bankers, Realtors and others in the industry. John Hunt, president of MarketNsight and ViaSearch, pointed out the distressing gap between new homes and resales at certain price points in the Atlanta metro area. He reminded attendees that this is the “new normal” and the market has reset both in terms of demographics and psychographics.
While home prices continue to rise for new homes in many areas, there are not a lot of buyers for homes priced at $500,000 and up.
“We are running out of cheap lots,” Hunt said. “We [builders] are all being funneled into the market for buyers who are capable of paying more than $500,000 and we are not all going to fit.”
Hunt explains, “Builders have been forced into this higher price point because of the increased price of land, increases in development costs, government regulations and the increased prices of building materials – lumber and steel among others.”
Hunt stresses that there is not a lack of demand, just a lack of supply at the price points where buyers want to buy. This is most obvious when looking at entry-level homes in the core counties where Millennials would like to buy. The prices of homes have pushed many Millennials to rent to live in desirable intown locations.
Sales in the suburbs remain strong, especially in certain high school districts. The top schools may surprise a few people as West Forsyth, North Paulding, North Forsyth, Cherokee, East Coweta, Archer, Creekside, South Forsyth, Lithonia and Lovejoy claim the top 10 spots.
“Many of these buyers are young, but they are people who have started families,” Hunt said.
During his presentation, Hunt touched on a number of interesting trends he is following including VDR (vacant developed retail), accidental active adult communities, coined by Hunt as “AAA communities,” and the need for innovation.
MarketNSight is focused on helping home builders and developers make smart decisions related to purchasing land and pricing product. Its groundbreaking Feasibility Matrix® systemizes the decision making process and creates a one-stop-shop for gauging new home community feasibility across every new home market in the nation.