I’ve written several posts in the past about builders who are buying up developed lots in Alpharetta, Milton and Cumming out of foreclosure and building homes in the lower price ranges. It makes perfect sense, with the tax credits and persistent demand for new construction among buyers. Home buyers almost always gravitate towards new construction, given the chance. In communities where homes may have sold in the mid $300′s in the past are selling in the $190′s – $210′s and comparable homes can be built in those price ranges because the builder has a lower cost of entry into the community and materials are cheaper now as well.

But what about those communities where homes were originally selling in the $800′s to well over $1 million? Construction stopped a long time ago, lots are in foreclosure, there may be an inventory of homes (that have been standing for quite a while); and home owners who may have purchased earlier on are way upside down. The list is long, but a few are The Manor Golf and Country Club , Valmont , Echelon , The Oaks at Crabapple , King Estates Manor , Blue Valley , and Kingsley Estates .

20 Months of Inventory

There are 195 homes on the market in all of North Fulton, listed from $800,000 to $1.5M, 119 in that price range sold last year. The demand for luxury homes has waned a bit, but not vanished. Credit is tighter and qualifying for a home in that price range is significantly more challenging but not impossible. The rub is when a home buyer looks at a community that has been frozen in time and asked, "is it safe for me to buy a home here? What will they be building down the road, and when?". Which brings me back to the main question posed in the title of this post, who will come back first, the Luxury Home Builder or Home Buyer?

What if a Builder started building homes in one of those stalled communities? Would you as a buyer feel comfortable purchasing one of those homes or are you going to look for something a little older but in an established community? For me, it would depend on a few factors. First and foremost, who is the builder? What price range are they building in now, compared to the existing inventory. And what is the product they are building? Are there covenants in place that will dictate size, exterior materials, etc.? What is the vision for the community and is that vision different than what was started? If it is, that’s not necessarily bad, but it should be considered.

As more builders buy foreclosed lots or decided to start selling homes on the lots they currently own (at lower price points) these questions will come up from buyers. It’s not a situation buyers need to stay away from necessarily, just proceed carefully and with good advice from a local advocate. Tell me what you think, I want to know.