Head scratcher… say what?
When writing a blog one must be knowledgeable about their subject material. The blogger must also put themselves out there when offering opinions and realize that they will not always be right. I often try to share my opinions on pricing and will be the first to admit when I am wrong. This would be the case regarding a comment I made in a post a few weeks ago. Just to clarify things, I was wrong on my guarantee, not my opinion of the price! At that time a new penthouse came on the market for $3,250,000. My comment was that this unit was way overpriced and I “guaranteed” we would see some price adjustments. Well we did not! And in fact, the unit is now pending.
After I made this comment, I checked with some friends in the business as to what they thought the pricing should be. Almost every one of them was thinking the same thing…or very close to it. The first comment was that it was Benson Tower, which is not really comparable to Portland’s nicer buildings such as The Cosmopolitan, The Metropolitan or The Casey, to name a few. Not one of those agents believed that it was worth more than $1000 per square foot. (about $2,600,00) let alone the $1257 per square foot listing price. For one, the neighborhood does not justify the pricing. It is not The Pearl District which always gets a bit of a premium. Second, that area of downtown has deteriorated the last few years. While this unit does feature fantastic outdoor space, the living room area is very small. One of the other issues that I also feel is important is the quality of the other units in a building. No other $1,000,000 + units have sold in the Benson Tower. Last week a 26th floor unit came on the market at $1,400,000, possibly trying to ride the high priced coattails of the penthouse. I believe this unit should be priced well below two of the units for sale at The Henry that are larger and priced below $1,300,000… probably closer to $1,000,000 at best. The point here is that it is easier to get a higher price when you have other units that support the upper end of the market. It’s tough when you don’t. The other issue, the “elephant in the room” is the homeless situation. No building has been affected more than Benson by the bottle drop a block away (maybe Elliot). In my opinion, while most condos got decent appreciation over the last 4-5 years, because of the decrease in safety in this general area, owners at Benson won’t see that appreciation that others have seen.
Overpricing a unit can have negative effects on it’s sale. In the case of the penthouse priced at $3,250,000, I believe that the buyer may not have been educated enough on the Portland penthouse and luxury condo market. It is possible that the agent does not understand this area of the market as well. While we don’t know the offer was on this unit, what we do know is that if the buyer paid anything over $1000 per square foot…he or she paid way too much! There is absolutely no way any unit at Benson Tower should have pricing anywhere near some of the premier buildings in town. Remember, this is a building where the finishes are far below those of other buildings and you have to haul your garbage down the elevator. Not an ideal situation for someone that is spending $3,000,000! There are many top floor penthouses in town that deserve a premium price to others…this is not one of them!
This posting helps emphasize the importance of working with a specialist. You may have heard me say this before but it is very important. If you are buying farmland in Dundee or a waterfront home in Lake Oswego, it is important to deal with an agent who understands that market. While every agent will probably tell you they understand every market, the truth is, unless you are in it every day, it is difficult to do so. I believe that the days of a real estate agent trying to be all things to all people in all areas are gone. An agent who takes the time to learn a specific area of the market will be far more valuable to a buyer or seller and the example used above helps prove that fact.
Brad Golik is a condominium specialist with Pearl District Properties. Brad works with luxury condo buyers and sellers in Downtown Portland, South Waterfront and The Pearl District. If you are looking to buy or sell…work with a pro!