In a recent Atlanta Business Chronicle article, Edward Andrews Homes’ CEO, Paul Corley, and Senior Vice President of Marketing, Caroline Simmel, provide expert insight on the Atlanta housing market’s steady comeback. An excerpt from the story by Tonya Layman reads:
Paul Corley, CEO of Edward Andrews Homes, said his company saw a huge spike in activity last year and he simply won’t see that this year, even though new home sales are up 15 percent over last year metro-wide.
“Several builders are out of lots on the ground ready to be developed and that is the case with us, too,” he said. “We think we will have a huge percentage increase next year.”
Corley said other factors slowing the new construction cycle is there are about 70 percent fewer builders than before the recession and many banks still aren’t confident lending money to builders.
Caroline Simmel, senior vice president of marketing at Edward Andrews Homes, said during the peak new permits reached epic levels of 60,000 annually. Historically, Atlanta has held steady at 30,000 as its norm. Last year, the area saw 13,500 new permits so she predicts it will take another four to five years to get back to that 30,000 norm.
“We don’t have the supply on the ground to meet the demand yet as we are seeing a stronger-than-perceived consumer coming back into the market,” she said, adding other factors affecting the industry have been delays due to weather and permitting backlogs as government agencies are stretched beyond their resources.
“Job growth is another factor,” she said. “We are seeing some steady growth in that area — it is not off the charts but it is stable. I think that these next few years with demand coming back and exceeding supply we will see strong housing recovery in Atlanta.”
“We think Atlanta is one of the top three housing markets across the country. There are a lot of people moving to Atlanta and with new job growth numbers hitting as high as 60,000 we have a strong runway in terms of household formations,” he said.
Currently, the inventory for vacant, finished new homes is at a little more than a 2.7-month supply and the prices have gone up on these homes by an average of 17 percent year-over-year. There was a big run-up last year in prices so Corley said Atlanta should finish off 2014 with a price increase of about 9 percent for new homes, on average.