on Aug 24th, 2008Condo Loft Glut Real Estate Correction Or A Bad Product Selling Badly?
In a recent newspaper, High-end condos’ low opening bids signal glut the author cites the auctioning of condo units at two different communities as a sure sign that too many high-end condominiums are going up in metropolitan Phoenix.
This is a totally reckless and poorly researched example of journalism. There is no way the journalist bothered to visit either The Vale Lofts or Optima Biltmore to determine the underlying problems with those communities before writing the article.
I sell loft and urban style properties for a living. I live, eat, and breathe the life style. Yes, we had a ton of investors sweep through the valley over the last couple years and our market has slowed as a result. However, I hardly believe that the problems we are experiencing in those specific communities signal a glut in general.
The architecturally interesting and colorful The Vale Lofts has been slow to sell because it is inferior to the competition. The developer stuck it on a crummy lot, apparently cut corners with poor construction and offered ho-hum finishes. It has urban design but has a far from urban location. It is not walking distance or even a casual bike ride from anything. Why would someone buy there when they can buy at Orchid House Lofts or Portland Place Lofts or Artisan Lofts on Central or the much older Hayden Place or any one of the many wonderful in-fill loft projects throughout the Valley? The Vale Lofts would not have sold well to begin with without the benefit of an unusually strong real estate market over the last couple of years. It is now suffering because the competition is so much better. BELIEVE IT OR NOT, INFERIOR PRODUCTS SELL SLOWER THAN SUPERIOR PRODUCTS. This, my friends is the same problem with Optima Biltmore.
Optima Biltmore is located in a fantastic area. Unfortunately, the community in general was poorly designed and the amenities are marginal. Even if we had not had a fantastic real estate market it would have sold because of the area. BUT IT WOULD HAVE SOLD MUCH SLOWER AND PRICES WOULD HAVE GONE UP MUCH SLOWER. The investors who bought up as much as 60% of the building bought with the hope of making hundreds of thousands of dollars profit. Well, that ain’t gonna happen, at least not any time soon. It’s no surprise to me that this inferior product is selling slowly but again I do not think that it is fair to say that this signals a general glut in the Phoenix condo market.
I am not saying that we are not facing a potential glut in higher end lofts and high rises but I do ask that The Arizona Republic PLEASE dig a little deeper before making gross generalizations supported with unjustified opinion.
Copyright 2006 Will Daly. All Rights Reserved.
Will Daly, a Realtor with RE/MAX Excalibur in Phoenix and owner of the marketing labels http://WeKnowUrban.com/, http://CondosPhx.com/, and http://WillDaly.com/, combines years of experience, a thorough understanding of current real estate markets, and cutting edge technology to provide his clients the best advice for proven results. He specializes in Loft and High Rise Development/Sales and Condo Conversions. You may reach him directly at (480) 510-8755 or by visiting one of his web sites.
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