Your opinion on the future of infill housing within the Perimeter... (Atlanta: real estate market, apartment)

[lolamom]

Just wondering if we expect the infill housing (ie teardowns) to continue at the same pace given the economy.....or what the outlook is for real estate within Atlanta ie the perimeter. I ask because my street is made up of half McMansions, half older ranches and I am wondering what to expect going forward..... The growth and rise in prices seems inevitable to me given the location but gosh, at some point, it has to stop, right?

So, put on your magic eight ball and give me your best guesses: What is your prediction of the impact of the economy on the local real estate market in places like Buckhead, Sandy Springs, etc...

Thanks in advance,

Lola

[MMANN]

It may slump for a while, but then immediately back up. Your whole street will be mcmansions within 5 years, and no ranches will be left.

[SoBuKev]

I agree...intown will continue to see heavy upward pressure on pricing and teardowns

[gt6974a]

I just don't see it, unless it's large developers stepping in. Land cost too much.

[Iconographer]

Yes, it will pick back up when the slump is over. Buyers looking for these want an intown location but consider the ranches outdated and inadequate for their needs. The only option for controlling the scale of these McMansions (the big complaint for most in the community is how they look relative to the houses beside them) is to create a RIOD (Residential Infill Overlay District) for your neighborhood. The RIOD will impose restrictions on the house size relative to its' neighbors (ie front door no more than 3 feet above the original, roofline no more than 28 feet).
I know in DeKalb County they have made it (intentionally IMO) a difficult and, on their end, disorganized process to get it implemented; however, I've seen some of the houses that have been built to comply with the RIOD and they are a vast improvement.

[spacelord75]

I think we are going to see a continued down turn for the next 3-4 years unless something drastic happens to expedite that process. There are so many factors pointing to a prolonged slump - true the subprime resets should be more or less done in 2008, but then you've got a wealth of option ARM and regular ARMs that will reset as well, and a lot of people who cannot refinance like they had planned b/c the banks won't let them (either due to too little equity in their houses or the house value being too low to accomodate the existing HELOC).

I honestly believe we are going to see a return to reasonable housing. There is absolutely no reason for a couple in their 30's with one child to live in a 4000+ sqft house. Think about it - this is a concept that was totally foreign to our parents and grandparents, yet now it has become so common place that kids feel entitled to such an opulent estate when they hit 30! So, in fact, I believe the McMansion will lose a lot of it's gusto because it's just not economically feasible anymore. It used to be a priveledge to own a home, but in recent years it has become expected and easy. I would be willing to estimate that 60% of the owners of intown mcmansions are upside down on their loans or in life in general - b/c not only did they probably take out heloc's to finance the construction of the house, but they probably also used the paper "appreciation" to then finance a car, boat, etc.

My recommendation would be to enjoy the hell out of your modest ranch home and think about what exactly you would do with an extra media room, great room, and two more bedrooms! Seriously, how many rooms do people need for watching tv?

There are a lot of people in a lot of trouble right now. Using one's home as a retirement fund or bank is a horrible idea. A home is a place to live and, perhaps, an outlet for creative interests and busy work (lord knows I can find tons on mine)...the concept of it as being a lucrative investment to finance one's life lasted about 7 years and is now dead. I think we are going to see a lot of people realizing that a house is a long-term investment and likely hunkering down for the long-haul, instead of this insanely stupid "climb the property ladder" mentality of recent years.

[Iconographer]

Originally Posted by spacelord75

There is absolutely no reason for a couple in their 30's with one child to live in a 4000+ sqft house. Think about it - this is a concept that was totally foreign to our parents and grandparents, yet now it has become so common place that kids feel entitled to such an opulent estate when they hit 30! So, in fact, I believe the McMansion will lose a lot of it's gusto because it's just not economically feasible anymore. It used to be a priveledge to own a home, but in recent years it has become expected and easy. I would be willing to estimate that 60% of the owners of intown mcmansions are upside down on their loans or in life in general

Boy, Spacelord, you said a mouthful...I have heard so many parents say that their children need their own bedrooms...why? My siblings and I always shared a bedroom, and I had friends that were three to a room. I honestly believe that it made us closer as adults.
And as for 'economic feasibility', I lived for years in Oak Grove (arguably Ground Zero for teardown activity); on my walks I used to chuckle at how many McMansions featured sheets over the windows...apparently after pouring everything into the house, the homeowners couldn't afford decent window treatments.

[RainyRainyDay]

Originally Posted by spacelord75

I honestly believe we are going to see a return to reasonable housing. There is absolutely no reason for a couple in their 30's with one child to live in a 4000+ sqft house.

This is just a "me too" but I can't resist saying Right On, spacelord. I have a spouse and one child and we live in an approx 1,800 sq ft "four and a door" 1980s colonial in East Cobb, for which we paid less than $200K and we have a 15 year mortgage with the intention of paying the house off before we retire. (Due to life circumstances, we were pretty old before we got into the housing market). I keep reading stuff on this forum that indicates the writers would likely consider my home too ... humble? downmarket? ... to consider living in themselves. People write there's nothing affordable in the good East Cobb school districts, by which I think they mean there are no affordable brand-new McMansions in East Cobb.

As you say, spacelord, how much space does a 3-person family actually need? And one thing we're very grateful for in the current downturn is that a 10% drop in house value is a lot less on our house than on a $500 house. Plus, being near the bottom of the price range, there's probably a limit to how far the value of our house is likely to fall.

[Noc]

Who is anyone on here to say how much space someone needs? The is a broad assertion to make. The statement should be how much space someone can afford. There are plenty of people who are early 30 with one child and have LARGE homes that can afford them. Hell there are people who are early 30's no children that live in an 800 sqft box called a condo/apartment that have monthly payments that rival these 4000+ sqft homes with option ,ARM's etc... Space isn't the issue in this day and age people are going after what they can't afford 4000sqft or 800 sqft.

[JPD]

Originally Posted by Noc

Who is anyone on here to say how much space someone needs?

Well, who are you to tell people what they can and can't say?

People can buy whatever they can manage to get a bank to lend them the money for, but that does not mean they NEED the extra space and luxuries. The only houses that are being built these days, particularly close to employment centers, are oversized and overpriced, because builders know that "want" has a lot of power over how people spend their (bank's) money.

Once all the normal houses in what were once modest (by today's standards) neighborhoods are torn down and replaced with huge and expensive houses it will be impossible for someone earning a middle, or even upper middle class paycheck to live in a reasonable house within a reasonable distance to their place of employment. This is a dangerous shift that is taking place, and we as a supposedly sophisticated society should be required and expected to question it.