Everyday I bring up the Portland condo list to see any new listings, see if anything has gone pending and to see if old listings have expired or were canceled. Sometimes what I see just makes me shake my head in disbelief. No question, this is a pretty hot market and I do see people paying more than they might normally do. And, while I do not believe we are at a peak yet, it is certainly not a time to let my buyer’s grossly overpay for a property either. Today, a new penthouse came on the market. This is a penthouse at Atwater Place in South Waterfront. The price is $2,700,000 and it is priced at $1000 a sq. ft., the same as what you are seeing at the brand new Cosmopolitan on the Park. Except that at the Cosmo, $1000 gets you up to the 27th floor in a brand new building!
Awhile back I wrote about three penthouse units that were priced in the $3,000,000 range. The first was the 3.8M penthouse at the Cosmo, which I thought would be the first to sell ( it just went Pending again this week). The first one to sell was actually the penthouse at The Elizabeth that was priced at $2,995,000. I represented the buyer on the purchase. You might have read in my blog “Who says it’s a seller’s market?” about the great price my buyer got for that unit… $2,200,000 fully furnished. The third one, and it’s still on the market, is at The Casey and still priced at $3,249,000.
I mention these three units because all three tried to push the $1000 ft barrier. I mentioned I thought the Cosmo would be the first to sell for a few reasons. First, it is a brand new building and brand new buildings always get a premium. Also, at 3.8M this is a property where the buyer can afford to “overpay” and are ok in doing so in order to have “The Best”. The penthouse at the Elizabeth was actually the first to sell and it sold for under $700 a ft.
In mentioning these three units, it helps clarify the pricing on the new Atwater Place penthouse. For one, it is not a new building…so no premium here. 2nd, it is not in The Pearl District…again, no premium here! (While I do like South Waterfront, the Pearl always gets a premium!) Also, keep this in mind, Unit #2403, a NE corner penthouse at Meriwether just went pending at $1,675,000 (598 sq. ft.). It was slightly larger and on a higher floor! At $1000 a sq. ft. the Atwater penthouse is just priced high. Sure, being a penthouse with great river views does justify a high price. (It does have outstanding outdoor living space) Will it sell? Sometimes there will be just the right buyer that loves the place, and the buyers agent usually sells homes in the suburbs and does not understand if a unit is priced high or not. The answer… you never know!
Another listing that was recently brought to me that is not in the MLS is one of the iconic townhomes on 11th in The Pearl. Before I mention this one…I want to show you a few of the comps first. Two units, with 2698 sq. ft. recently sold. One for $1,850,000 the other for $1,900,000. A third sold ( 2 units combined with 3888 sq. ft) for $2,425,000 , or $623 a sq. ft. The third had many high end custom finishes and was designed by the exceptional designer, Jefferey Lamb. Ok, drum roll please…. The new listing , #621 which is 2698 sq. ft… is priced at $2,600,000! Are you kidding me? When I questioned the agents pricing, he mentioned that all three of the comps were going through substantial remodeling. Ok, lets use the combined unit that sold for $2,425,000. Let’s say the new buyer decides he wants to put in an additional $400,000 in remodeling. This would still put this unit at $726 a sq. ft. , or $237 a sq. ft. less than #621 which is at an absurd $963 a ft!
Now you know why I just have to shake my head sometimes in the mornings while looking at new listings!
My purpose of writing about some of these overpriced units is not to beat up on them, but only to help educate buyers so that they don’t overpay for a unit. If you are a buyer in the market for a Portland condo, I know this market inside and out, especially the high end of the market. I would love to help you find your next dream condo so please, give me a call and we can begin to turn your dream of owning a luxury Portland condominium, into a reality…for the right price!
Brad Golik is a condominium specialist with Pearl District Properties. His area of focus is The Pearl District, South Waterfront and Downtown Portland. Brad is a founding member of Condo10 and an expert in internet marketing. You can reach him at 503-896-8856 or at firstname.lastname@example.org , www.LuxuryCondosofPortland.com
We have all heard the market in general is doing pretty well in terms of units selling reasonably quick. That is if they are priced correctly! Condos in the $300,000 to $700,000 price range have done well and there is not much current inventory. This is the reason they are selling reasonably quickly. How is the upper end of the market doing… units that are priced from $750,000 and up? Inventory levels in the Million dollar range is much better than the lower range. For example, in the $600,000 to $700,000 range there are only seven listings! In the $1,000,000 + area of the market there are 25 listings. How are the Million dollar listings selling? Very well, if priced right. Units that are not priced right will languish on the market and eventually, very typically, get punished with lowball offers. A great example of this scenario is the penthouse at Envoy that was just recently sold…after many years on the market. The last offering price on that penthouse unit was $2,249,500 it sold this week for $1,807,800…20% off its list price! In this market, with low inventory it is smart to price your unit on the high end of a range but there is a fine line and if you cross this line, it can cost you in the long run.
In the high end of the market, units are selling. Three of the last $1,000,000+ units that have sold were cash buyers. This is something we have seen as very common the last year. In the highest end of the market there are several really nice units available. Toping the list is the largest of the penthouse units at the Cosmopolitan priced at $3,883,000. If I had to guess, this will be the first one to sell of the three penthouses that are in the $3,000,000 price range. The other two, the penthouse at the Casey priced at $3,499,000 and the penthouse at the Elizabeth priced at $3,298,900 are very overpriced in my opinion. ( so is the one at the Cosmopolitan…but it will eventually sell very close to its asking price). The other two are priced in the $1000 a square foot vicinity. This is way too high, in my opinion, for units only on the 16th and 14th floors. Part of what you are paying the high price at the Cosmopolitan penthouse, is the likelihood of your views being uninterrupted. This happens when you are 28 floors up, not so much when you are on the 14th floor. I happen to really like the unit at the Elizabeth and would love to show it to clients but when priced so high over the market, the reality of the sellers taking a realistic offer, which would be substantially less, is less likely to happen. The current price just scares buyers away from even viewing it! If it were priced right out of the gate, chances are, in this market, it would be sold by now! If you are a buyer in the upper end of the market, a unit to not overlook is the penthouse at The Westerly priced at $2,950,000. This is the most spacious of the penthouse units with 3662 square feet. On top of that, two massive decks that offer some of the best outdoor living of any condo on the market! Not only are the views here better than the Cosmopolitan views ( remember, The Westerly, at a higher elevation looks OVER the Pearl District …kind of of like living on the the 80th floor of the Cosmopolitan… if it were available!!) the massive deck space makes entertaining an amazing event with these killer views! If this is a penthouse unit that you would like to view, give me a call because it is always a treat to show it to clients!
The Westerly Penthouse
Rounding out the “near” $3,000,000 range, while not a penthouse, is one of the most unique! The combined townhome in the iconic townhomes along 11th is a pretty special home. In August, the pricing on this townhome was reduced from $2,975,000 to $2,775,000. It offers 3888 square feet of living space with room for 4 cars to be parked. In addition, this townhome will not be burdened with the monthly HOA fees of the others, which run between $1,500 to $1,900 a month. While this townhome has yet to sell, I believe because of its eclectic design, the right buyers will come along and when they do they will be buying a pretty special place to call home.
Brad Golik is a luxury condominium specialist with Pearl District Properties. If you would like to view any of the above mentioned Portland penthouse condominiums, call Brad at 503-896-8856.
You can visit his website at http://www.LuxuryCondosofPortland.com
In a post I wrote a little while back I mentioned that even in a hot market, where everyone seems to believe that there are no deals in the market, that sometimes deals do come along. Today is one of those days! If you are in the market for a 2 bedroom unit with over 1400 square feet, this is your lucky day! Just a short walk north of the Fields Park in the Pearl District, you will find a wonderful 8 story condominium tower called Pacifica. I have sold many units in this building and know it probably better than any agent in town. Two days ago a unit came on the market priced at $575,000. This 3rd story unit has a spacious layout, 2 and half baths and a very large deck that looks over the Willamette River. The reason I know it is drastically under priced is that two years ago I sold the same unit, two floors up, for $575,000! In this time the market is certainly up more than 10-15%. Taking that into consideration, you would be looking at a price of $610,00– to $632,000. The current price, at $391 a square foot is VERY low to the comps in this building. I sold 4 or 5 units in this building between $418 to $450 a square foot last year! I will be pricing another unit there soon and we were going to be looking at $500 a square foot. This might be a little more difficult now with the agent selling unit #303 so far below market value.
Again, for those who are patient, and work with an agent that knows the condo market, there are good values that do come up in the market. Unit #303 at Pacifica Tower is one of them!
If you are a buyer and looking for a great 2 bedroom unit, there is not another unit under $750,000 in the market right now that I feel beats this one.
If you would like to go view this unit, give me a call today and I will set up a showing! Call me at 503-896-8856
When writing in a blog, it is sometimes difficult because you put yourself out there to occasionally be wrong. When I get feedback from readers it is often appreciated. It is not always positive, but that is ok! After my post the other day about the $2,975,000 unit that I felt was actually under priced, I got an anonymous email from someone that wanted to call me out on a comment a made a short time ago about a unit right down the block I thought was overpriced. That particular unit was another one of the iconic townhomes on 11th that was priced at $1,899,000. That unit was recently sold for $1,850,000…a number I still think was too high. Remember, this townhome had a neighbor that sold about a year ago (with virtually the same high end finishes) for $1,390,000. Do you really believe the market is up 33% in that time span? It’s not! But let’s take a closer look.
The listing agent did get a good price for the seller but this opens up a whole different issue because the agent also represented the buyer. While it could be said that he got the sellers a good price for their unit, the buyers, who he was also representing, overpaid! I am not a big fan of agents representing both sides in a transaction. Have I done them before? Yes, but it is with full and absolute disclosure. Do you think this agent told the new buyers it was overpriced? Now the market value is what someone is willing to pay. I agree with that but, buyers come to us for guidance and our experience and knowledge in pricing. You cannot be telling one party it is a great selling price and then at the same time be telling the buyers it is a good purchase price. As an agent, my duty to the seller is to get them the very best price that I can. In doing so, I will not put my integrity at risk just to get both sides of a transaction. This is where a good agent must step away from both sides of a transaction and focus on his or her duty of getting the best price for the seller. To be fair to the other agent, maybe this agent did disclose to the buyer that they were overpaying for the unit and they were ok with it. Do I believe that the agent said to the buyers “This unit is priced over 33% from it best comp that sold a year ago and the market is certainly not up 33%”. I doubt it seriously.
I do not have a problem with an agent handling both sides of a transaction when something is reasonably priced and full disclosure has been made. When something is selling at 33% over its best comp…that is a whole different story.
As a buyers agent, I would not have advised my clients to pay over $1,750,000 for this unit( still over 26% from comp). If the buyers loved it and were ok overpaying for it, this is ok as it is their choice. But if they are receiving guidance from an agent whose main responsibility is to maximize the sales price for the seller…? I wonder what that same agent would have thought it was worth working as a buyers agent only for someone? Unfortunately, it is sales like this that will mislead inexperienced agents into false pricing. The next thing you know is we will see some agent trying to price one of these single units for $2,000,000!
As for the person that wanted to call me out for being wrong, that is ok! It is people like you that keep me on top of my game so I actually appreciate you and thank you for your comments. I will not always be right but you will always get my honest opinion. Also keep in mind though, it is always good to have a good understanding of the whole picture before making comments, and this is something I always work towards. So in closing, yes, I still think 617 was in fact, overpriced!
If you have been reading my blog for any length of time, you have heard me discuss the pricing of The Cosmopolitan. Most of what I have said in the past blog post is that I have just felt the the pricing is way too high. Today what I want to talk about is the effects of this pricing.
Just short of a year ago, one of the iconic Pearl District brownstone style town homes along 11th sold for $1,390,000 or $515 a square foot. Now keep in mind these town homes don’t come on the market that often so the buyer of that unit did pay a premium to get it. Now fast forward almost a year later. The next door neighbor of this unit just put their home on the market. The square footage of the unit was an identical 2698 feet. These neighbors put their home on the market for $1,899,000 or $703 a square foot. Not only did they put their home on the market, they got 2 offers within the first 2 days it was on the market! A year ago it would have been thought that $703 a foot was insane for these units. What has changed things that makes these units jump 36% in under a year? I would call it “The Cosmopolitan Effect!” What do I mean by this? When the Cosmopolitan came to market, it brought unheard of prices for this area. Now with $700 a square foot being almost a starter unit at the Cosmo, and with prices reaching all the way up to $1,200 a square foot, $703 a sq. ft. for one of the Pearl Districts most recognized set of homes almost makes it seem under-priced! Why not pay $703 a sq. ft.? It’s only 58% of what they are trying to get at the Cosmopolitan!
Remember that buyer that “overpaid” or paid a premium of $1,390,000 for their town home? Well thanks to the developers at Hoyt Street Properties, they are laughing all the way to the bank with their 36% return!
Part of the high prices we are seeing is no doubt coming partially from our very low inventory. The other part, no question, is coming from the effects of the Cosmopolitan pricing, or as I like to call it, “The Cosmopolitan Effect!”