In my last post I expressed my opinion on the pricing of the new 28 story condominium, Cosmopolitan on the Park. The feedback I have gotten back has mainly been very supportive of my article with a majority of people totally agreeing with my thoughts. Not all agreed with me though. One undisclosed comment ( perhaps someone with the development company?) thought that Portland was ready to support these prices. One even went as far as to say that they thought I might have an ax to grind with the developer. This could not be further from the truth. As an agent that specializes with condominiums, I was as excited as anyone for this new project to rise from the ground! With low inventory levels, the idea of having a new project to sell was just what I needed! I cannot sell something that I don’t believe in or something that I view as a financial risk to my clients. I may have some clients that might still make an offer but at least they will be going into it with a good idea of the market risk involved.
With that said, let’s just jump to the facts. To date in 2014, 35 condos have been sold in the $1,000,000+ price range. Now remember, these are the best of the best in the Portland condo market. The average price per square foot of these 35 sold units was $579. Only 4 of the 35 units sold above the $700 a sq. ft. level. Two of these were at The Casey, one was a penthouse unit at The Gregory and the other was a penthouse at The Henry.
Now to do our best to compare apples to apples we will take the average price per square foot of only the 2+ bedroom units at the Cosmopolitan because that is the case with our top 35. The average price per square foot of all the 2 bedroom units at the Cosmopolitan…. Drum roll please, $739 a square foot! That is $160 a square foot higher than the best of the best. Now keep in mind, a penthouse unit will often carry a higher price per square foot than typical units and a good portion of our top 35 units were penthouses and still the average was only $579!
The fact is that I just believe this project is overpriced for the Portland market and I believe the above numbers supports my beliefs. The real estate industry is really supported by comps and the numbers above, and market demand, do not justify the prices being asked. One person suggested because they were not paying buyers agents enough that my opinion was somewhat skewed. While the developer is paying substantially lower than the project I mentioned last week in Seattle as well as the hot new twin towers project, Lumina in San Francisco, sales credit has nothing to do with my opinion. What it does have to do with, in my opinion, is the greed factor. Cutting back to what they pay the agents that have helped them with past projects, and charging over-market prices to condo buyers is a win-win situation for the developer! Many years ago I interviewed the CEO of what was at that time the largest real estate company in the world. What he said to me still remains in my mind today. He said “The best real estate transaction is one in which everyone wins!” In this current situation…only the developer wins… that is until they need to reduce prices to get the project done!
Since our last blog post last week there have only been 3 additional sales at the Cosmopolitan, now with a total of 36 sales. These 3 units were 1 bedroom Garden level units priced in the $400,000 range.
If you have questions about the Cosmopolitan or would like to look at some of Portland’s other great condos, give me a call at 503-896-8856 and we can set up a tour or just discuss opportunities in the Portland condo market.
Brad Golik is a condominium specialist and can be found at www.LuxuryCondosofPortland.com