State of The Union: Summer 2014

June 20th.  Summer has started and the housing market remains strong with Condominiums and Lofts very much in demand.    The Intown property market for Single Family also continues to gallop ahead at a breathtaking pace.     Clients of mine who have purchased new construction Single family starter homes and Duplex units are now seeking their homes worth up to $100k more then what they paid just this time last year.     Many of my Condominium Buyers of $200-400k units are also up $40-50k in the past 12-18 months.     In such a lackluster economy how has this price appreciation taken such hold?    Well, there are a lack of other hard assets that pay dividends in terms of tax breaks and/or rents.

As many know, I spent most of the past month in Asia.   Korea, Vietnam, Laos and Thailand.    Bangkok in particular has a large luxury highrise market, especially in such areas as Thonglor and Asok.     The dramatic ascent of this luxurious product segment literally came about in just the past 10 or so years.     Like highrise markets in New York or South Beach, Bangkok’s prime buildings now trade as a valued commodity with values easily discerned from simple analytics like size, and height of floor within each building.

Atlanta is getting there.   More and more young professionals, empty nesters, seasoned investors, rich university students (who are often from overseas) are finding the ultimate value and safety in holding a hard asset like a Condo.     Condo’s unlike an Intown home I would argue have a much more secure, and understandable and quantifiable value proposition.      As many note, Condos in general have not historically appreciated as fast as Single Family.   That said, as the world becomes more and more intertwined, like minded individuals will flock towards each other in terms of Country, City, and yes lastly even by building.     Prior generations would flock to have large families in established suburban upmarket neighborhoods.  Slowly but surely, more and more of that market has opted for city living and have often put off or completely foregone having children.

In Asia, this being my first time back in ages.   A few things struck me.  One is how strong the property market is, and how much stronger these economies are versus nearly ten years ago last I was here.    Simultaneously, the US after some down years, followed by many meager 2% growth years,  finds itself hardly above its Economic level from the end of 2004 (think 17 trillion dollar economy vs a 16 trillion dollar one 10 years ago), most all of these Asian countries I visited (Korea, Thailand, Laos and Vietnam) have all doubled their economies over the same time spam through the compounding of 6-7% growth rates.      The “new Asia” was actually depressing to one of my travel delegation, a commercial real estate attorney who noted that he fully expected to see the real authentic Asia, not this developed world homogenization.      To this I quickly replied that even in a communist state (Vietnam, Laos) the people cannot be held back, and that a drive to work hard and succeed there is overwhelming.

While in Hanoi, when talking to both locals and expats, it became more clear what value Real Estate can have for many of the people here who have worked hard and obtained wealth.   In both Vietnam and China the only way to send money overseas is to produce a contract for the bank officer to see.      You cannot simply wire money overseas to an outside account of your own or to a friend or family member.  Accordingly, as my Real Estate Attorney friend noted, in Los Angeles Chinese are paying double the value for vacant land’s highest and best use.   Why?  Simple, to have a way to transfer some of their ever grown wealth out of their communist nation.     As noted in my last blog entry the race to hard assets is world-wide.   Thank goodness much of that capital is coming to the US.  Without it this country would be in trouble.

Drilling down to a more micro level, I am seeing a strong demand for 1 bedrooms at all levels and price points.     After the strong run that 2 bedroom units have had I suppose it is about time that 1 bedrooms have their day.  I will write in more details as it pertains to a number of the Midtown buildings in the coming week.   In all honesty, my mind is still spinning from my tour, and am getting excited for July’s jaunt to Argentina.    But that said, I am loading an assortment of listings this week and next, and am still very much a leader in the condo market.  Last month I closed two units at Viewpoint, this month another, and I have more listings loading.

In the coming weeks I will be introducing a new member to the ATL Condo Deals team.   My Realty makes your Real Estate goals a reality.  As always if you are seeking the inside track as to what is going on, area by area, building by building, socially or financially then owe it to yourself to contact me.


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