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A new Portland luxury condominium listing you MUST see!

Two days ago I listed a new luxury condominium, Unit #2701 at Fountain Plaza ( KOIN Tower). This gives me a great opportunity to use this listing to compare to the prices being asked at The Cosmopolitan. As many of you know, I have felt that the pricing at The Cosmopolitan was very high, not only compared to the local market but also the downtown Seattle market. (and that market is ALWAYS a higher price) . The unit I listed is an amazing 27th floor unit with an incredible 3834 square feet of living space. This number does not include the 2 decks, one on the east side of the building and the other on the west. Yes this unit occupies an entire half floor! Stand in the northeast corner living room and you will be amazed at the views of Mt. Hood, Mt. Adams and Mt. St Helens (and on clear day, Mt. Rainier) Luxury_Condos2

In addition, at night you look northwest to the incredible twinkling lights of the city. From your living room and deck, take in stunning views of the Willamette River. One thing I will say in comparing this unit to any at the Cosmopolitan, is that you will not find this combination of views in ANY unit at the Cosmopolitan! The real catch here… Priced at $2,250,000, or $586 a square foot. This is slightly over half the price of a 27th floor unit at The Cosmopolitan ( $1,192) Is that building worth $606 more than Unit #2701? So what would you do with all the additional space offered in Unit #2701? It does have more than 1480 extra square feet of space. With 4 Bedrooms, 4 Baths and its own 16x 13 Gym, you have plenty of space! And by the way, that Gym is  not the community building gym, it is part of unit #2701! Luxury_Condos1Often, when a new building comes on the market, people get excited over something shiny and new so let’s take another angle to compare. If a person were to purchase Unit #2701 and do a $250,000 remodel and include a spectacular kitchen (something far superior to the 3 color scheme kitchens being offered at The Cosmopolitan) you would still be buying at only $652 a square foot.  So let’s do the math $2,250,000 for a 3484 sq. ft. unit with absolutely stunning 3 mountain, city and river views or $2,704,000 for 2351 sq. ft. for Mt Hood and southern views? And by the way, what would you do with that extra 1480 sq. ft. of space?  To see photos and a video of this spectacular unit, go to http://www.FountainPlazaCondo.com. If you would like a private viewing of this amazing unit, please call me direct at 503-896-8856!

Brad Golik is a condominium specialist with Pearl District Properties. Please visit his Portland condominium website http://www.LuxuryCondosofPortland.com

Portland Condo Sales for March

Condo Sales for March

 Portland Condo sales for March were strong considering how low our inventory is. In the month of March there were 63 sales in the area that I cover, which is from Pearl District, Uptown, Downtown to South Waterfront. This includes all condos and town homes priced above $200,000. To compare, February had sales of 37 in that same area. What is very interesting though is not the increase in sales of 70%, which is not unusual for this time of year, it is that there are currently 122 pending sales. Now 122 pending sales is nothing unusual, however, what is unusual is that this is the first time since I started writing in my blog that the pending sales actually exceeded the Active listings! Currently there are only 110 Active listings in my designated coverage area.
Portland condo sales

With numbers like this it could increase the numbers for appreciation in our area. While it was expected to see growth slow down some, the numbers may be higher than expected. It is certainly a sellers market with the low levels of inventory we are seeing. What will be important is the number of units that normally hit the market this time of year. As I mentioned, being a sellers market, this has been a huge windfall for the developers of The Cosmopolitan as they are getting buyers to plunk down a non refundable deposit for high priced units because of the fear of not being able to buy resale units at other buildings. If we were in a normal inventory market, I guarantee we would not see buyer’s overpaying for units.

If you are one of those buyers who may be looking for an upscale, high floor unit and looking to pay above $1,500,000… be patient! Next week I will be listing a unit that will be priced in the ballpark of $560 a square foot. A comparable unit in the

Cosmopolitan will cost you upwards of $1,000 a square foot! In my listing you could do a $250,000 remodel and still come in under $615 a square foot. Yes, sometimes patience does pay!

Brad Golik is a condominium specialist with Pearl District Properties.

Specializing in Portland Condos , Portland PenthousePortland Town Homes, Portland Highrises, upscale buildings including The Casey, The Metropolitan, Park Place, The Henry, The Westerly and many more!

Coffee and a Little Real Estate!

Today I sat at Starbucks with my tablet to do a little work. As I took a few calls and reviewed listings online, I noticed the person next to me taking an interest in my work. We struck up a conversation as she enjoyed hearing about real estate and what was happening in the current Portland condo market. One of her comments was, after listening to 1 or 2 of my phone calls, how important marketing was to me when it came to listings. She mentioned to me that agents she had used in the past did very little marketing and pretty much just posted her listing in the local MLS and waited for a buyer. This is not unusual as this is exactly what many agents do!

PortlandCondominium_prices

As she became more engaged and interested, I explained to her my “Laws of Probability”. What I mean by this is that the more marketing you do, and if you do it in the highest quality fashion, you will attract more quality buyers. The laws of probability show that if you have more people interested in something…the price usually goes up!

This person, I feel, became very educated today on what a person needs to do to capture a top price in the sale of their condo or home. She was pretty shocked when I showed her some new listings that came on the market the previous 2 weeks. What I showed her was that with half of those new listings, the listing agent did not use a professional photographer. In fact, a couple had photos that were so bad she felt bad for the owners trying to sell. I explained my philosophy on this subject… If an agent cant spend a couple hundred dollars to “show off” your home the best they can, they should not be in real estate. Good agents work hard for their clients and spend the money to “Market” their home. This is part of what they are getting paid a commission to do. If that agent is not spending money on quality photos then they probably won’t spend money on a video, quality print materials or internet marketing! It was interesting when she asked me why owners would hire agents like this? I told her sometimes they just hire the agent that helped them purchase the unit and often don’t know any better. I also told her that unfortunately, many sellers think like those agents. In other words they think they can just put it in the MLS and get it sold. While this may be true, it will sell eventually…but at what price? There is a reason that many advertisers try to put their product in the consumers best light, because they know those consumers will pay a higher price if they perceive that product to be better.

If I get a listing and put it in the MLS with average photos and no additional marketing will it sell? Yes, eventually it will, but I don’t believe that I would have done everything possible to get my clients the highest price for their unit. I believe it is my job to spend the money necessary to promote that condo the very best that I can and make it stand out so that buyers perceive this to be the best unit available and are more comfortable in paying a higher price.

Brad Golik is a condominium specialist with Pearl District Properties.
Find him at http://www.LuxuryCondosofPortland.com  503-896-8856

Inventory rules…and an update at The Cosmopolitan!

Inventory has been very tight recently but the last two weeks we have seen an upsurge in new listings, hopefully a sign of what is to come. Traditionally, the spring is when we start to see an increase in listings. Never has this been more needed than in this current market. In our last blog post we mentioned that the sales, while slow, at The Cosmopolitan have benefited from the lack of inventory. While those units will not close until the summer of 2016, people fear they will not be able to purchase what they want and feel the need to make an offer at The Cosmopolitan. Right or wrong, this is what I feel is happening. Buyers feel that while The Cosmopolitan may be overpriced, as we have stated many times, they feel like there may not be units come on the market between now and the summer of 2016. For current seller’s, this is a huge advantage in capturing a premium in the sale of their units. Recently I showed a unit before it was even on the market. This unit was on the 15th floor of the Metropolitan and priced at $1,200,000. The seller got an offer before it went on the market. Because of the lack of inventory, and the very high prices at the Cosmopolitan, the seller was able to get $637 a sq. ft. This was a large unit at 1881 sq. ft. To get this size of a unit at The Cosmopolitan you would need to spend $1,600,000 for 1773 sq. ft. I think the buyers of that unit got a very good deal. As for an update of sales at the Cosmopolitan, they are currently at 59 sales or 39% of the building sold. One of the new sales was finally above the 21st floor. This is only the 2nd unit that has sold above the 21st floor to date which is not surprising when you consider the prices ( these 2 units sold for $875 and $1,000 a sq. ft) For comparison, I will be listing a unit in another high end building, above the 21st floor for about 595 a sq. ft. Brad Golik Condo Specialist One thing to keep an eye on at The Cosmopolitan is to see if they get any offers on the penthouses or junior penthouses. Many times, buyers of penthouse units may buy a unit even when they know it may be overpriced. Sometimes it may be that these buyers have enough money that they can overlook the price to get what they want. This has not happened yet at The Cosmopolitan. If the general public see’s that someone is buying those units and paying $1000 to $1200 a sq. ft, it somehow makes them feel justified to pay $800 to $1000 a sq. ft. To date, the project has had several of these units go pending and then go back on the market. Perhaps it is the realization that they were about to pay $400 to $600 a sq. ft. more than the average of all of the Million dollar condos that sold in 2014 ( $579) Again, these were the best of the best in Portland! If and when the Cosmopolitan does sell one or two of the of the eight junior penthouse and penthouse units it may add to peoples confidence to put down an offer on the units on the 20th to 25th floors. Right or wrong!

Sales at the Cosmopolitan…Slow, but being helped by the market.

When I first started writing in a blog I searched out some experts to see what they said in terms of building a good base of readers. Here is what they said: “To grow a blog and add readership the most important thing you can do is be truthful and honest in your writing. When you do this you will gain a following of people that will trust what you have to say and come to you for solid advice.”

With this in mind, I have always tried to be honest in my comments. This does not always please everyone. But the truth is that you will NEVER please everyone. Recently I got a letter from the sales manager of the Cosmopolitan, a new high rise condo project in the Pearl District. This was a pretty nasty email that voiced her displeasure with my comments on the Cosmopolitan project. In her email she stated that a couple of my comments were rude. Let me address this. First, I have never made a negative comment on the project itself other than the pricing of the units. I happen to love the project and feel it is needed.

What she may be alluding to is the “fact” that I was not happy that the developer was requiring buyers to be pre-approved through a specific lender at Wells Fargo. I mentioned that ( and they fail to mention) this lender happened to be the husband of this sales manager. I don’t believe this was rude on my part, only trying to disclose to the general public something that I believe they should have disclosed upfront.
CosmopolitanCondominiums Now back to business! Here is the latest update on the Cosmopolitan ( and for what it is worth, I have had many request for these continued updates). Currently the building is 33% sold. Not much of a change from my last post. In my last post I mentioned that there were 46 units sold, today they are at 49 units sold. In other words, only 16 units have sold since after the grand opening. As mentioned before, there is still only 1 unit above the 21st floor that sold for a whopping 900 a sq. ft. I was told that 2 of the junior penthouse units went pending…those sales have not happened and all of the junior penthouse and penthouse units are still available ( for those of you inclined to pay an astronomical $969 to $1,641 a square foot price.)

As I mentioned before, with most of the low hanging fruit taken…ie. Units that were priced closest to reality to the market, sales I believe, will become harder to come by for the developer. With a current absorbtion rate that could slow down even more, I believe it could take the developer 18 months to 2 years to sell out this project. With that said, I don’t believe the developer can afford to do this and in my opinion, as stated before, I believe they will be forced to drop the prices on this beautiful new high rise. Part of the reason that they have had the sales they have had at this point I believe is because of the low inventory in our market. Some buyers do not want to wait for new resale units to come to market. Keep in mind, the Cosmopolitan will not be completed until mid 2016 so the inventory levels we are seeing now can change dramatically over that period of time.

And while the high prices at the Cosmopolitan may help sellers get a higher price when selling their condo in this current market, buyers will still be better off buying resale and updating after their purchase. With sellers seeing this effect on pricing, it might push them to put their condo on the market sooner than later. If this happens, it could help with the low inventory situation we are now seeing. For buyer’s, the excitement of living in a new beautiful building like the Cosmopolitan can be pretty tempting. Again going back to the fact that in 2014, the top 30 condos priced at $1,000,000 and higher averaged a price per square foot of $579. These were the “Best of the Best” in Portland. Do you think it is prudent to pay amounts at the Cosmopolitan that are $200 to $1000 a square foot higher?

Is it a good time to sell my Portland condominium?

For those of you who might be thinking it’s a good time to sell your Portland condominium…you are right! Inventory levels are at historically low levels right now. Yes, the sellers are back in control over the market currently. If you think you want to sell, the best thing you have going for you right now is the low inventory levels we have currently. You will be able to push your price a little and capture a bit of a premium because of the low inventory levels. If you are a buyer, you need to react quickly when you find a condo on the market you like because if you hesitate, you could lose out.

With that said, I believe buyers are being a little smarter this time around and not chasing deals with excessive multiple offer situations. In other words they are being much more patient. While they might not get the unit they want, this time around they are willing to wait for the right one to come along without getting into a bidding situation.

What about the new Cosmopolitan? Well you have heard us talking about the prices at the Cosmopolitan a bit. The prices they are asking will actually give sellers a window of opportunity to push the price a little as well. If the Cosmopolitan is asking $800 a square foot for a unit, it is a little easier for a seller to push their price from $590 a square foot to $610.

Stay tuned for our latest Cosmopolitan update…coming soon!

Cosmopolitan vs Park Avenue West Tower

Just to clear up any confusion there might be in comparisons to pricing at the Cosmopolitan and the Park Avenue West Tower. I have gotten several calls and emails recently asking me how the pricing at the Cosmopolitan compares to the pricing at the new 30 story Park Avenue West Tower adjacent to the downtown Nordstrom building. The fact is, that while there is going to be 15 floors of residences at the new Park Avenue building, they will not be condos for purchase. They will be units that are higher end rentals and not for sale!

Park Avenue West

Cosmopolitan…Yes, I am still saying “wait!” (update lll )

Since my first post about the Cosmopolitan I have gotten many calls and emails from people to discuss the Cosmopolitan and the pricing. What is interesting is that a number of buyers are trying to justify the pricing with comments such as…but it will be new and have all new appliances! Here is what I often tell them. “If you want new appliances, by a resale condo in a nice building like The Metropolitan, put $30,000 to $50,000 into a nice kitchen remodel and you will still be way ahead of the game compared to paying extremely excessive prices at the Cosmopolitan!”

 Since my last update on the Cosmopolitan… not much has changed.

If you can recall my first post where I wrote about the euphoria of the new project and the normal sales of a new project when the developer sold 33 units during the grand opening. A couple weeks later I said the total sales were at 36 (December 11th). As of today, sales at the Cosmopolitan are at 40. From our last writing they have sold an additional 3 of the 1 bedroom garden units. These were units that were selling in the high $300,000 to the $400,000 range. (also priced in the $550 to $575 per sq. foot range. ) Most of the units that sold during the euphoric grand opening period were the smaller 2 bedroom units on the NE corner which sold out units #717 to #1817. The price range for these units was $769,500 to $918,000. The price per sq. ft for these units went from $575 to an excessive $680 for unit #1817. In my opinion, units #717 to #1317 in the $575 to $600 range is not unreasonable… still high, but not totally out of line. . 70% of the original units sold in the grand opening were in the $550 to $620 price per sq. ft. range. The low hanging fruit is now gone!

I am still sticking to my belief that this project is way overpriced! They have sold very few of the 1 bedroom units other than the popular Garden units. They still have not sold anything above the 21st floor with one exception, unit #2315, priced at $1,773,000 (crazy $1,000 per sq. ft!) I am still a little baffled as to why 8 to 9 buyers paid between $800 to $1000 a sq. ft. Again, was it the excitement of a new building,? Was it that they did not have representation from an outside broker to explain to them the severity of the high price per square foot they were paying? While it is certainly not my intention to bash this project, because I was as excited about it as anyone, the fact is that it is just very much overpriced. I believe it everyone’s right to make a reasonable profit from their hard work. But when I see excessive numbers in several areas that benefit the developer beyond a normal number, that is when I have a problem. Overcharging buyers by a considerable amount over the current market, again, the developer can pocket additional excessive profits. What happens to those buyers who are buying a unit for $650 to $1200 a square foot, and then realize a year after they move in they need to sell their unit for whatever reason. These buyers will be hammered in the resale market! Why? Because they paid $650 to $1200 a square foot in a market that should be $450 to $850!

What is my hope on this project? While I personally never wish bad on anyone, I do hope that sales remain as slow as they have been and maybe get worse. This will force the developer to drop their prices to REASONABLE numbers so that buyers don’t get punished when they become sellers in 2-5 years! In addition, my hope is that they will also go back to everyone that has made a purchase and additionally drop their prices as well. Again, I said the low hanging fruit is gone for the most part and sales will only get tougher for the developer moving forward as they try to sell a ton of units in the $700 to $1200 sq. ft. price range.

 

Buyers…ask yourself this one question. Should you be paying more for a condo than a similar project in Seattle? And remember, this project in Seattle is only 60% sold after a year and a half and has the benefit of Amazon as a nearby job force to support it! In addition Seattle is just priced much higher than Portland in general!

 

I am adding the graphic below again because I believe it tells a story pretty well!

If you still have an interest in making a purchase at the Cosmopolitan, please give me a call and we can discuss what may be the best values within the building because there are some units that have better value than others. Call Brad Golik at 503-896-8856.

Cosmopolitan pricing

2014 Condo review!

As we settle into 2015, let’s take a look back at 2014. For the state of Oregon, prices were up about 7% for the year. In the condo market, in the main downtown, Pearl and South Waterfront areas, the number of sales were down to 755 sales compared to 2013’s   978 condo and town home sales.

Oregon7%

In the Pearl district, a new building began to take shape ( see: Overpriced Cosmopolitan ) and is the first new project, other than apartments, to take place in a long time. The biggest surprise of 2014 in my mind has to be the interest rates. If you can recall, last year all of the experts were calling for much higher interest rates for the coming year with most predicting 5% to 5.5% by the end of the year. The facts…. Rates on the 30 yr closed at 3.875% for the year end. As you may have heard me in the past when I mentioned that you could replace all of the economist with all the weatherman in the world , nobody would ever know! Well “they” were way off this last year! The next chart shows you the projected appreciation for the next several years. As you can see, they were off a little in their 2014 appreciation projections!

 

 

FutureAppreciation

 

While condo sales were down for 2014, luxury condos priced $1,000,000 and higher were up for the year with a 25% increase in the number of sales over 2013. While the number of sales for 2015 is expected to be higher, the appreciation is predicted to slow to the normal 3 to 5% range. Which building had the most sales in 2014? Well this was an easy one…Waterfront Pearl led all buildings with sales as they continued to convert the building back to ownership condos from rentals. Encore came in second as that building finally sold out it’s new construction project.

What should we expect from 2015? Stay tuned and check back here often to be updated in the Portland condo market!

If you have plans to buy or sell a condo in 2015, remember it pays to work with a condo specialist! Call Brad Golik and let him assist you with all of your condo needs!
Brad Golik
Certified Condominium Specialist
http://www.LuxuryCondosofPortland.com

503-896-8856

The Cosmopolitan on the Park pricing… Part ll

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!

 Cosmopolitan_Prices

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

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