ATLANTA, GA - Atlanta luxury home sales are outperforming the rest of the housing market in 2014, led by big gains in Buckhead and other intown neighborhoods such as Ansley Park, Morningside and Virginia Highland. Even non-traditional luxury markets like East Cobb and Dunwoody are experiencing sizeable increases in $1 million-plus sales, demonstrating a search for value beyond traditional luxury home strongholds.
Year-to-date, sales of homes priced $1 million or more are up 14.3 percent compared to 2013 according to our local MLS, while the overall number of home sales across all price ranges is unchanged from last year. However, the average sales price of $1 million-plus homes is up just two-tenths of one percent in 2014 to $1,496,545, while the average sales price for all home sales is up 7.9 percent from 2013 and has reached all-time highs this fall.
What do these two conflicting data points say about the luxury homes market? Sellers of high-end properties are discounting prices to get their homes sold. Even though credit is easier to obtain than at any time since the financial crisis and the economy is in the best shape since the Great Recession, demographic forces present challenges for the luxury market. Most owners of luxury properties are baby boomers who want to downsize. The generation that is most likely to buy their homes is Generation X (born between the mid-1960s and early 1980s) which is so relatively small that it was recently surpassed by the millennial generation (born between the early '80s and early 2000s) in home-buying market share. Also, Generation X buyers typically prefer new or renovated homes to resales and smaller homes than their parents. Appropriately, the homes we see leading the discount parade are typically large homes that are not updated.
Some other interesting facts that are driving Atlanta's luxury home market this year:
1.) Condo sales of $1 million-plus represent almost 9 percent of all $1 million-plus sales in 2014. While that may not sound like much, the market share of high-end condos was just 3.5 percent in 2007.
2.) 51.2 percent of homes sold for $1 million or more this year were in Buckhead; 73.2 percent of homes sold for more than $2 million were in Buckhead; 92.9 percent of homes $3 million and up were in Buckhead.
3.) There are four geographic areas in metro Atlanta with average sales prices of more than $1 million in 2014:
Buckhead North ($1,263,047 which encompasses Chastain Park and neighborhoods south and west of the park such as Asheworth, Conway Glen, Kingswood, Randall Mill, Tuxedo Park, and Whitewater Creek that are in the Warren T. Jackson Elementary School district.
Buckhead Northwest ($1,286,348 encompassing the area west of Interstate 75 and east of the Chattahoochee River in the Warren T. Jackson Elementary School district and including such streets as Cloudland, Garraux, Ridgewood, and Rivermeade.
Buckhead Northeast ($1,078,289 encompassing the area north of Chastain Park, south of Johnson Ferry and River Valley roads, east of the Chattahoochee Nature Preserve and west of the High Point neighborhood. The school district serving this area includes Heards Ferry Elementary School and Riverwood High School.
Historic Brookhaven ($1,268,375 which encompasses Brookhaven from Peachtree Dunwoody Road east to the DeKalb County line, north to Johnson Ferry Road and south to Peachtree Road. This area is served by Sarah Smith Elementary School.
Looking ahead to 2015, we see many bright spots for Atlanta's luxury home market:
Atlanta continues to attract new residents who can afford luxury homes which will offset demographic challenges previously cited. Resale inventory of $1 million-plus homes is down from a year ago in many of the hot spots I mentioned earlier. This should drive prices up, encouraging more sellers to put their homes on the market.
New construction is back, particularly on the high-end. Inventory of the $1 million-plus new homes that Generation X loves is up 53 percent from this time last year.
For sellers thinking about putting their home on the market in 2015, do so early in the year. The largest month-to-month increase in Internet traffic for real estate websites is in January and Internet activity peaks in March and April so the window to leverage the market in your favor is very small.