Housingdoom has not put a lot of emphasis on condominiums in the Phoenix area, so it’s time to look at condo sales in the Valley. There is a lot to look at. (Condos, that is. Not sales.)
According to the Arizona Real Estate Center, the condominium market has cooled, along with the rest of the Phoenix market:
(Condominiums saw) a decrease from 1,470 sales for May 2006 to 1,035 sales for June, which is below last year’s 2,125 sales. Further, the median price declined slightly from $175,000 in May to $174,700 in June.
According to the Arizona Republic, Almost 8,000 condos and lofts are planned or under construction across the Valley now, more than what went up in the Valley in all of the past 10 years. The list of overbuilt and under-occupied condos in Phoenix is extensive, but we will focus on just a few- La Terraza at Biltmore, Orpheum, Portland Place, and Biltmore Optima.
First is La Terraza at Biltmore. Also according to ZipRealty, there are currently 138 units for sale in La Terraza -this is out of 224 total units- all units appear to be listed by the developer. That means that at least 62% of the units are available. La Terraza doesn’t seem to be opposed to investors- a pop-up on their home page guarantees to provide a renter for one year if you buy one of their condos.
Next, there is the Orpheum, an exclusive property which touts the fact that it will only be selling 90 units. The 8 units listed on ZipRealty all appear to be for sale by individuals. There doesn’t seem to be a rush to purchase them. The newest listing is 56 days old- the oldest is 375 days old- the oldest adopting the unusual sales strategy of raising the price twice this summer.
Next is Portland Place -which it’s website assures us is closing out Phase I. However the Downtown Phoenix blog states:
According to Portland Place sales reps, the first phase is not totally sold out (despite what some realtors have believed). In fact, while the permitting process for the 10-story second phase is ongoing, groundbreaking can’t occur until the requisite number of sales take place in Phase 1. The sales reps seemed to indicate that they are still short of that figure.
The statistics from urbanliving360.com- are concerning from the Tapestry development. They show that the MLS is indicating only one sale/month, and the price trend is downward- this from a project with 280 lofts. (The number of sales by the developer that were not on the MLS are not shown.) Eighteen properties are listed on ZipRealty. MLS listings are a mix of developer owned and individually owned properties.
Here are the sales shown by UrbanLiving360:
The price trend for Tapestry is rather obvious, dropping 37% in five months.
02/06
1726 sq ft
$625,000
$362/sq ft
03/06
837 sq ft
$290,000
$346/sq ft
04/06
1280 sq ft
$356,301
$278/sq ft
05/06
1514 sq ft
$380,000
$251/sq ft
06/06
1686 sq ft
$401,740
$238/sq ft
07/06
1514 sq ft
$345,000
$228/sq ft
Optima Biltmore is located in a fantastic area. Unfortunately, the community in general was poorly designed and the amenities are margi
nal. 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 going to happen, at least not any time soon.
According to a June 4 Arizona Republic article: Four condos in the Optima Biltmore Tower on Phoenix’s posh corner of 24th Street and Camelback Road are going on the block this month. The high-rise homes were listed at $949,000 when they were originally put on the market last year, and none sold for that much. The opening bid for one of the condos now is $475,000.
Negative news on the Phoenix condominium market is not always well received. When the Arizona Republic said that problems at the Vale Lofts and the Optima Biltmore were a sure sign that too many high-end condominiums are going up in metropolitan Phoenix, Weknowurbanblogspot.com called their comments totally reckless, and (a) poorly researched example of journalism.
At the risk of being as "reckless" as the Republic, it is clear that high-end condos here are a good idea that has run amok. For years there was a need for such projects downtown. Unfortunately, when "the bubble" hit Phoenix, it hammered the condo market as well. It will be a long time before this sector of the Phoenix housing market recovers.
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