by Anne Schwall — Atlanta Business Chronicle
Inventory of new condos continues to dwindle away with current supply at a record low not seen in 10 years.
Haddow and Companies 2012 Midyear Condominium Report states that the unsold inventory of new construction stands at 1,520 units, down from the 2011’s midyear level of 2,369 unsold units.
These statistics indicate that 68 percent of available inventory has sold in the Atlanta in town new construction condo market, a refreshing percentage to a real estate sector plagued over the last five years with a glut of supply and a historically weak market.
Condominium sales have remained steady during 2012 and with no new project starts on the horizon, supply and demand are coming back into balance.
New construction high-rise towers that have dominated the Atlanta skyline such as Gallery, Luxe and Viewpoint are celebrating sold out status, and Twelve Centennial Park, Brookwood and Astoria are more than 75 percent sold. Dwindling supply can even be seen in the luxury sector where projects such as Sovereign that boasts an average sales price over 1.3 million is currently 50 percent sold.
The one factor until now that has eluded a recovery for the condo market has been pricing. Rampant speculation by investors and a historic building boom helped create the condo bubble seven years ago. As the financial world imploded and the market turned south, there was an onslaught of short sales and foreclosures that flooded the market and depressed prices.
These low dollar sales have kept downward pressure on prices until now. Pricing is finally showing signs of upward movement. In July the average sales price for the intown condominium market was $189,000 up from $154,000 for July 2011, a 23 percent increase.
This uptick in pricing has been sustained over the last three months. Third quarter average sales prices for all condominium sales resale and new construction were $176,000 up from $157,000 from the same period in 2011, a 12 percent increase. These are refreshing signs for beleaguered condo buyers who have questioned whether they made a good investment.
As supply continues to diminish and sales demands remain steady pricing will continue to tick upward and allow the condo market a true sustainable recovery featuring fair winds and following seas.