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. 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!