Archive for the 'New Construction' Category
Crabapple is on SALE! Crabapple Crossroads Reduces Prices up to $95,000
categories: Alpharetta Real Estate, Crabapple, Milton Real Estate, New Construction
Not just "on sale", but "really on sale." Williamscraft, the builder of Crabapple Crossroads has reduced prices by $40,000 t0 $150,000 across all their communities. In Crabapple Crossroads, the reductions are from $40,000 to $95,000 for a 4 bedroom and 3 bath house with no basement. The advertised price is $459,900.
Crabapple Crossroads is the Lew Oliver designed neighborhood with the seven three storey "brownstones" at the entrance and the design made to feel like a village. The homes mostly have front porches and are closely set to the street with sidewalks. The idea is to get people out of their homes and develop more of a community feel. It is possible to walk to diner and to some of the best public schools in North Fulton: Crabapple Crossing, Northwestern Middle and Milton High School.
However, even given this innovative community design, the Crabapple location and the good schools, Crabapple Crossroads has struggled. To date, only seven homes have sold and there are currently thirty-three homes for sale.
Clearly the issue has been price. They say, "Price cures all ills," so Williamscraft has reduced prices. Paying over $500,000 for a 4 bedroom home on a small lot with no basement was a hard sell when you could go up the road into Milton and find any number of larger homes on acre lots with basements for $500,000 - or less. Admittedly they are older homes, but everything is a tradeoff.
With the price reductions, now you can buy a brand new 4 bedroom house in the mid $400’s at Crabapple Crossroads, which is more inline with the current resale market.
One funny thing about these huge price reductions, though. I was talking with a builder of million dollar homes recently. We were discussing some of the huge price reductions on luxury homes in Milton and Alpharetta - and the one in Echelon, in particular. This builder asked me, "Just home much profit do the buyers think builders have in these luxury homes?" He was alluding to having to make a living himself.
I was EXTREMELY curious to know exactly how much profit is built into a $2,000,000 home in someplace like Echelon or The Manor, but I wasn’t gauche enough to ask him for his profit and loss statements. I will say, though, that when a builder like Williamscraft reduces prices 20% more or less across the board it gives the buying public the feeling that there was a lot of profit built in initially…assuming that Williamscraft is not taking a loss on these homes.
This market behavior, in turn, leads other buyers to get jaded and feel like they should be demanding more concessions from sellers…and the cycle perpetuates itself. This is why, from an overall market perspective, it is so important to get the price right from the beginning. Once you start reducing the price, you never get close to what you would have gotten because buyers smell that blood in the water.
Posted by Kevin Warmath | Currently 2 Comments »
Only Two Remain - Real Estate Marketing Missing the Mark in Milton
categories: Alpharetta Real Estate, Milton Real Estate, New Construction
MILTON - This sign cracks me up. Just who do they think they are fooling?
The sign reads: Only Two Left. But it is pretty easy to see that there were only THREE to begin with! Every time I see this sign my brain flip flops it and I read: Only One Sold! I think this sign does more harm than good. What do you think?
The sales strategy of creating urgency, sometimes artificial urgency, is not new. "While supplies last…" "Offer good until midnight tonight…" "If you call within the next five minutes, you’ll also receive…" We’ve all heard them.
Anyone who drives up and down Birmingham Highway regularly knows that there have been "only two left" for about six months! Where is the urgency in that?
The funny thing is that the two remaining houses are actually pretty darn nice. They are just over priced is all. That is why there are "only two left." Duh.
Originally, one of the remaining houses was listed at $899,900 in March last year. Then it was reduced to $849,000, still didn’t sell and the builder fired the realtor…go figure. Builder hires a new realtor and lists the house at $914,000. I don’t get it either. Since then, the house has been reduced to $890,000 and now to $855,000.
I’m not sure if the dog is wagging the tail here or vice versa, but unrealistic beliefs about the price make you do silly things with marketing, or at least transparent things that everyone knows don’t work. It is not better than holding an open house for a property that is overpriced thinking that increased traffic is going to get it sold. You can market an over priced property all day long and it is not going to sell until you get the price right - and you are going to look silly in the process. Worse yet, you are probably not even going to get an offer.
If anyone wants to buy a quite nice brick home on Birmingham Highway for around $750,000, call me. That is where this house should be priced.
Posted by Kevin Warmath | Currently 3 Comments »
Buyers Throwing Cash at Builder in Johns Creek | Alpharetta
categories: Alpharetta Real Estate, Johns Creek Real Estate, New Construction
JOHNS CREEK - You won’t see this reported in the mainstream media: Over the weekend, buyers were literally throwing deposit checks at the onsite sales agent at Jaden Woods.
The agent put TEN lots under contract and had to ask buyers to leave and come back for scheduled appointments.
It seems that not all builders are hurting for home sales.
Jaden Woods is a new home community by Ashton Woods of 66 homesites. The price for a four bedroom, three and a half bath home starts at a little over $400,000. Over the weekend, Ashton Woods opened phase two at Jaden Woods.
The community is located off McGinnis Ferry Road east of Hwy 141. Being in the Northview High School district and close to the new Emory Hospital are two of the main selling points of the location.
Posted by Kevin Warmath | Currently 4 Comments »
Alpharetta’s Real Estate Market Soft at the Bottom, Mediocre in the Middle and Ripe at the Top
categories: Alpharetta Real Estate, Local Market Conditions, Luxury Homes, New Construction
It used to be that Realtors had the bulk of information necessary to be effective when buying or selling real estate. This information included tax data, recent sales data, even lists of homes available for sale. Remember the old MLS books Realtors might let you borrow over the weekend to see what was on the market?
Realtors used to keep as much of that information close to the vest because they believed that information was power, or at least a competitive advantage in earning a living, if not an outright anti-competitive tactic to preserve an industry. The Internet pried all that information loose even as certain MLS’s tried in vein to keep it out of the public eye.
Today, information about real estate is everywhere and easy to get online. In fact, there is too much real estate information for any carbon-based being to consume. I can’t consume it all and I doubt you can either. Granted, I’m a slow reader, but if real estate is my full time job and I can’t wade my way through, how is it even slightly possible for a non-real estate professional to consume it when you have a full time job doing something else?
That leads me to my premise, which is that today, a good realtor’s value is not in providing you with information, but rather in interpreting that data in a meaningful way. I get calls at least weekly from readers of this blog saying basically, "There is some much information about schools, traffic, new communities, recreation, housing prices, etc., that I don’t even know where to start. Can you please help me sort it all out."
Absolutely. THAT is my job: to sort it all out, make sense of all the data and help guide you in an important buying or selling decision.
Let’s get right to the data.
Would you believe that in this "horrible" real estate market that the average sales price for a home in Alpharetta / Roswell / Milton / Johns Creek is UP 4% over last year at this time? Amazing isn’t it.
That’s right. The average sales price through October, 2006, in Alpharetta and surrounding cities in North Fulton was $409,000. This year through October it is over $427,000.
But what about all the sellers in the market who say that there house is not selling? They do have a beef: There have been fewer homes to sell in the Alpharetta area year to date than last year. So far this year, 2,953 homes have sold versus 3,336 last year. That is an 11% drop.
Fewer sales X a higher average sales price = about the same amount of market volume, right?. That’s almost right. To date, $1.37 billion of residential real estate has transacted so far versus $1.62 billion last year. That is a drop of 8%.
The Alpharetta / Roswell real estate market is over a billion dollars. Where exactly is the 8% drop showing up?
If we dig a little deeper, the bottom end of the market is the part getting hit the hardest. Homes sold below $200k are off over 30%; fortunately, that is not that large of a part of the market. The number of sales between $200 and $500 is off by approximately 10%. The $300-$500k price range is the heart of the market and why it matches the overall numbers closely.
Above $500k, the market looks a bit different. Between $500k and $1MM, the number of homes sold is off about 6%. And get this: more Million Dollar Homes have sold in 2007 than 2006. In fact, the absorption rate (the common measure of supply and demand) for million dollar homes has decreased from 45+ in July to This 13% increase in the high end market has also likely masked some of the market pain at lower price points by making the averages sale price higher than it otherwise would have been.
The interesting thing about the new high end home sales, particularly on the west side of GA-400, is that while, yes, there have been more sales this year than last at the top of the market, there is also much more inventory in the high end as 2007 ends. Last year there were 70 $750-$999 homes on the market west of GA-400; this year there are 99, which is 3 months more inventory than last year. There are 129 homes over one million dollars versus 99 last year. That is a formula for hungry builders and great deals for buyers at this price point.
So what are the lessons?
Houses are still selling; fewer of them yes, but still at fair prices. Buyers still complain about the market, but I’d challenge them to really evaluate the condition and value of their home. Two of my favorites sayings are that "pigs get fat and hogs get slaughtered." Are you a pig or a hog in this market?
One of my other favorite saying is: "The market is always right." If you have your house on the market and it is not selling, that only means that there is a better value in the market someplace else regardless what your belief system tells you.
If you are a buyer, consider this: Atlanta, and Alpharetta in particular for reasons mentioned all over this blog, has huge upside potential for appreciation. Albert Niemi, former dean at the Terry School of Business at UGA, recently spoke at a Bank of North Georgia function and said:
- North Georgia (Greater Atlanta) is going to be one of the great growth engines in the U.S. economy.
- Atlanta is one of the cheapest places to do business in the country (and also has a relatively low cost of living and good climate - I added that part ;->).
- Atlanta is one of the four fastest growing cities in the U.S. (with Dallas, Phoenix and Las Vegas).
A blogging real estate colleague of mine in neighboring Cherokee County wrote last year that metro Atlanta is growing at about 100,000 new residents per year.
Atlanta’s and Alpharetta’s real estate market won’t be this "depressed" for long. You can buy million dollar houses for a fraction of appraised value and you can buy a $600,000 house in Alpharetta for what you’d pay hundreds of thousands more in other cities.
Regardless of whether you are a buyer or seller, though, remember: The market doesn’t lie.
Posted by Kevin Warmath | Currently 6 Comments »
Johns Creek Walk Means It: Live There and You Can Walk to Dinner
categories: Buyers, Crabapple, Johns Creek Real Estate, New Construction
When was the last time that you walked to get ice cream after dinner at home? When was the last time that you walked home from the bar after happy hour on Friday evening?
If you answered “Absolutely Never”, I’d believe you.
Around Alpharetta and the other cities in North Fulton – and around most of suburbia for that matter – we drive everywhere, usually because we have to. We live in neighborhoods with one road in and one road out and the only way to the grocery story is via Chevrolet.
We are starting to get some options, though. “Mixed use” developments are all the rage and starting to make their way onto the North Fulton real estate scene. Let’s not kid ourselves: As quaint as the idea sounds we aren’t going to get rid of our cars anytime soon and all of a sudden start walking and biking everywhere as if this were Manhattan or someplace in Europe. However, the occasional walk to a restaurant or shop would certainly be a move in the right direction and one of the aspects of life that is lost when you move from “in town” to the suburbs, or as we say in Atlanta, “outside the Perimeter.”
One of the best new examples of mixed use is Johns Creek Walk at State Bridge and Highway 141 being developed by Atlantic Realty Partners. While of Phase 1 is still underway, the finished product will consist of a mixture of single family “Manor Homes”, townhomes, apartments and retail/restaurant space. There are also resident amenities that include a nice pool, a 24 hour lounge/cyber cafe, meeting space and an exercise room.
Single Family Homes and Townhomes
In Phase 1, there are seventeen single family lots and currently only one Manor Home available, while two others are under construction at the mid $600k price point. There are six unsold vacant lots still available.
Thirteen of the 44 townhomes are sold. These are Artisan and Craftsman style townhomes with sloping roof lines, stone and brick exteriors and shake accents.
Apartments
There are also 210 units of apartments, which is the first apartment development in the Johns Creek area in 10–12 years. Local residents resist apartment buildings because of “the clientele” they attract, but the fact is that a mature real estate market needs to offer housing solutions for all segments of the economy and with the completion of the new Emory Hospital in Johns Creek and all the peripheral medical offices that are developing, there is a greater need for apartments.
Retail Space
My favorite part of Johns Creek Walk is the combination of the retail space to the residential space, which puts the “mix” in mixed use. There are clothing, children’s and computer stores; framing and art shops, a small grocery, a real estate office and a couple restaurants and bars. The sports bar has a TV in each booth so you can watch exactly which game you are interested in. Plus, Johns Creek Walk is catty corner to Super H Mart where you could easy walk to the grocery to to get your dried octopus and some kim chee.
Best of all, there is a Ben and Jerry’s ice cream store which I can only hope stays open late for those end of day chocolate issues. Image how easy it would be for a man if he lived in Johns Creek Walk with his pregnant wife. He could walk around the corner to fulfill her ice cream craving and would be only one mile from the hospital when the moment of truth arrived.
From a retailer’s perspective, the greatest thing about the retail space is that there are apartments in the back of the retail shops. This can either be used as a “back office” or for a true apartment for someone who wanted to actually combine their work and residential space or for someone who lived further away but found it convenient to literally sleep over at the store during the week, for instance.
Crabapple
Elsewhere in North Fulton, Crabapple has a chance to become more mixed use. I’m hopeful, but cautiously optimistic. As part of the new Crabapple Crossing development, there is some retail planned, but nothing other than an Italian restaurant, a dry cleaners (like we need another one of those!) and a women’s fitness studio has opened. I’m waiting for the ice cream store…or better yet, a gelato store. Then, I’ll actually park my car and walk around, but until then I’m still just driving through.
Vickery
Just north of Alpharetta, in Cumming, is another good, new example of mixed use, the Vickery community that includes awesome parks, amenities, retail and even a YMCA. It also has gelato!
In Alpharetta, Prospect Park, which is under construction at Old Milton and GA-400 will be mixed use and the Roswell East development at Holcomb Bridge and GA-400, which is currently “in hibernation” was also proposed to be mixed use with a lot of actual office space included in the design.
Mixed use is clearly a development model that is here to stay and making headway in North Fulton. Developers see it as a way to build higher density, which is necessary given the higher land costs and lack of any remaining large parcels of land. Politicians like it because more new development means more tax base and mixed use potentially means less car trips. Anything to alleviate traffic is good for politicians and the public alike. I’d be curious to know what you think of mixed use. Would you prefer to live in a “traditional neighborhood” or do you like the idea of being to run out for Ben and Jerry’s without the car keys?
Posted by Kevin Warmath | Currently 4 Comments »
Lake Haven Progress is Slow, but Potential is Great
categories: Milton Real Estate, New Construction
Back at the new year, I promised more details on the new Lake Haven subdivision off Freemanville Road in the new City of Milton. It is slated to be another “high-end” development in Milton, but I think it stands out from the crowd because of the lake, the terrain, the location (closer to Alpharetta) and the amazing hardwoods that are on the property. They didn’t cut down all the trees…thank you!
To date, the only activity at Lake Haven has been the installation of the roads, curbs and the start of the front entrance. Apparently, like a lot of new developments in Milton and Johns Creek, time has been spent working with the new city to get properly permitted. I’m told that the neighborhood plat should be recorded any day now. Lake Haven is all dressed up with no where to go yet.
In total there are 61 lots, all about an acre. Sixteen of those lots surround the 7–acre lake. 
The picture on the right shows an arial view of the land before the roads were cut in. There is also a 100 foot waterfall south of the lake that is planned to have a nature trail along with 66 total acres of common space. The whole development is about 100 acres, giving you a density of roughly .6 homes per acre.
The finished homes in the neighborhood will range in price from $1.2MM and up. Of course, up…you can always go up! The lots in the front of the neighborhood along Freemanville start at $280K, and lots on the lake are $410k.
The neighborhood will not be gated and it will not have swim or tennis facilities. No swim/tennis is my only knock on the development (if it must be developed, that is ;->). No gate and no amenities will keep the homeowner’s association dues low and if you are building a million dollar home I suspose you can put in your own pool. However, my humble opinion is the a neighborhood pool – and it doesn’t have to be a junior olympic sized pool either – and a couple of tennis courts are a “nice to have” particularly if you are spending so much to live there in the first place. Plus it allows a greated sense of community as you can meet your neighbors at the pool on Friday after work or for tennis on Saturday morning.
If you are familiar with the Six Hills neighborhood, the look and feel that they hope to accomplish at Lake Haven will resemble the homes in the front portion of Six Hills: relaxed country look with shake roofs, front porches, breeze ways, etc.
To control the architecture in Lake Haven, the developer has put together a builders group which consists of some of the top builders in the area. Each builder has drawn by lottery three lots to date. If you want to purchase a particular lot you will be asked to work with the assigned builder if at all possible. Of course exceptions can always be made, but that is the model they have put in place.
The builders were initially required to build two spec homes each. However, with so many million dollar homes on the market in Milton, that requirement is likely to be reduced to one home per builder.
Three or four non-builder-assigned lots have been purchased to date with the buyers putting down $5,000 non-refundable deposits. Some of these people are ready to start construction as soon as the City of Milton gives the go-ahead, hopefully this Fall.
That leaves ony 19 of the 61 lots spoken for in some way or another, and in actualily, all the builder’s lots are available, too; you just need to try to work with that particular builder. There are a lot of great lots in Lake Haven and all of them have fantastic hardwood trees on them.
There are also some in the back of the neighborhood that back up to the Cooper Sandy Creek, so plently of opportunity still exists in this neighborhood, which I believe will ultimately become one of the nicer ones in Milton because of the small size of the neighborhood, the style of homes and the beautiful terrain and woods.
Posted by Kevin Warmath | Currently 2 Comments »
Buyers Should Use a REALTOR Even When Buying New Construction - Part 2
categories: Alpharetta Real Estate, New Construction
I wrote earlier that one good reason to use a realtor when purchasing new construction is to manage issues around the inspection and to make sure you are buying a quality home. There are other reasons, too. We’ve run into other situations recently where buyers of new construction have had trouble and a realtor can help.
Earnest Money or Builder Deposit
When you purchase a new construction home often times the builder will ask for a “construction deposit”. This is different than earnest money. Earnest money is your “skin in the game.” It is your good faith that you will close the transaction, but it is refundable if any of the contingencies on the contract (typically financing, inspection and sometimes the sale of another home) are not released. Earnest money is held by a third party in an escrow account until the transaction is close.
As an agent representing buyers, our brokerage is always the third party holding the money. If there is ever a dispute over earnest money - and this does occur more often than you would think - the broker holding the money has some discretion on how it is dispersed. In other words, the broker can evaluate the facts of the case and use her best judgment to make a dispersal. If the other side does not agree there are defined dispute resolution procedures managed by the Georgia Real Estate Commission. However, at least with us holding the earnest money, the burden is really on the other side if they want to pick a fight and take it to the Commission.
Builder Deposits are different. A deposit is a deposit and is usually for the builder to complete certain finish items on the house to your tastes. Understandably builders want to get paid for modifications and finish items they put in a house for you and they reason that if you don’t wind up buying the house that they have invested on your behalf and may have to “undo your changes” in order to make the house appeal to another buyer.
The Missing $100k Deposit
We’ve had two cases recently where there have been issues with deposits. The first, we had a $100k deposit on a house (it was a big house) AND a contingency to sell the buyer’s home. The builder took the deposit and spent it (there are some cash starved builders in this economy) and the buyer’s home didn’t sell in time. Fortunately there were reputable real estate brokerages involved on both sides and the builder’s partner took out a personal loan to repay the deposit, but this could have gotten sticky.
The Lost $10k Deposit
In another case, a buyer put down $10k as a builder deposit. The inspection report then revealed significant issues with the home to the point where the buyer did not want to close. The builder refused to refund the deposit and even threatened to sue the buyers to make them perform under the terms of the contract and buy the house. The contract stated that repairs could be made after closing.
Realtors were not involved in this transaction and the buyer wound up walking away from his $10k deposit and the builder never pursued the lawsuit as far as we know.
Beware of the contracts that you sign with the builders. They are not the standard Georgia Association of Realtors contract and they are heavily slanted in favor of the builder. If you are not going to use a realtor, at least consider having an attorney review the contract before you sign. At a minimum, read the fine print yourself.
Posted by Kevin Warmath | Currently No Comments »
Buyers Should Use a REALTOR Even When Buying New Construction - Part 1
categories: Alpharetta Real Estate, New Construction
Now that my client has moved in, I feel like I can tell this story. You see, my client used a REALTOR and he purchased a new construction home. The reason I mention this is because I humbly suggest that had he not had a realtor he wouldn’t be living in the new home he has today. If you ask him, he would say the same thing.
I’ve have occasionally worked with clients who believe that we can only help them with resale purchases. They see the new construction offices staffed with eager sales people who are brimming with brochures and think that is all the information they need - and that they might get a better deal if they “come without an agent.”
Indeed, I had one client who was relocating to Alpharetta. We started working together but he had a house to sell in North Virginia so we didn’t actively pursue anything. After a few months we reconnected and I learned that he had bought a new construction home. He told me that he felt he was able to get a better deal on his own: he paid full price for the house but got the builder to finished the basement for him.
It worked out okay for this client, although I believe an informed agent he could have negotiated a better deal: Builders are routinely reducing purchase prices by $25k, $50k, even $100k on million dollar plus homes. I just saw where one of my favorite homes in Canterbury on the Lake sold for $1.35M. That’s $100k less than the list price.
Back to my more recent client, though. He never would have achieved his goal of purchasing in Alpharetta had we not had the good fortune of working together. The home he selected was originally built as a model home in a nice new Peachtree Residential neighborhood. We elected to get an independent inspection. I always suggest this even though the home is brand new and the builder offers a warranty. You never know what you will find. Often buyers who don’t have an agent decide not to get an inspection because they figure how much can be wrong with a brand new house.
Our inspection report came back with page after page of defects, some of them structural and potentially deal killers. I read the report, called my client and told him, “We have our work cut out for us.” I was amazed that a top-end builder could produce a product with so many flaws. Where were the building inspectors in all this? I wondered if anyone from the county was actually walking into these house to inspect during construction.
Admittedly, private home inspectors can be overly picky in some cases; but in our case the inspector was very thorough and cited the building code of all the defects, although I felt the wording of the report was a bit inflamatory. If you read the report there would be no way you would buy the house: it sounded like the roof was falling in and the foundation splitting in two.
I knew this was a good house, though, and we had negotiated a good purchase price, so we went to work on the defects. I was simply AMAZED at the way Peachtree Residential stepped up, owned the issues and resolved them above and beyond the client’s (and my) expectations. Had Peachtree not been so agressive, this deal would have fallen apart.
Peachtree rebuilt decks, repoured concrete, reran duct work, added attic access and ventilation, obtained engineering reports and analysis and extended their structural warranty, to name just a few. They had workers crawling all over that house making everything just right and we closed on time with a happy client.
I wouldn’t say that it was an easy transaction. I will say that had the buyer and the builder not had a realtor to a server as “transactional lubricant” and to communicate each party’s concerns to the other in a way that was constructive and moved both sides closer to resolution, the transaction would not have closed even will all Peachtree’s efforts. And I’ll tell you, as much hard work and stress as it was, there was a great sense of satisfaction at closing for the value added in this process.
If everything were easy, there would be no need for realtors, attorneys, sports agents and the like. Things are NOT always easy though, and competent professionals can and do add value in new construction situations. Stay tuned here for more stories from the trenches on how a realtor can keep your marshmellows out of the fire when buying a new construction home.
Posted by Kevin Warmath | Currently No Comments »
Download my vCard for your Outlook Contacts
