Just yesterday I was having a conversation with two other agents who do a fair number of condo sales. The topic of conversation was the market and the consensus was that it has definitely seen a slowdown in pricing. With the increase in inventory, we are noticing a slowdown in terms of appreciating prices. In some cases, the pricing could even be slightly less than what we have been experiencing for so long.
And then this happens! Just this morning, on the MLS, a penthouse unit at The Casey went from pending to sold. The unit never hit the market. The sold price, brace yourself, $4.5 million cash! Unit #1503, is a 3667 square foot condo that faces the West Hills. Consider these numbers for a moment. At $4.5 million, this is $1227 per square foot! Let’s compare this to the recent penthouse sales at The Cosmopolitan. Now keep in mind, for comparison sake I will use the penthouse units from the 27th and 28th floors at the Cosmo. The combined unit on the 27th floor sold for $5,441,294, or $1216 a square foot. The two top floor penthouses on the 28th floor sold for $1215 and $1225 a square foot. These units are 13 stories higher and have superior views of the Mt. Hood, Mt St. Helens, the city and the Willamette River.
I will say, The Casey has always been one of my favorite buildings… but really? Is this unit worth nearly a million more than a 28th floor, true penthouse that is 13 floors higher? While the Casey unit does have around 400 square feet more space, (which does not really mean that much once you get over 3,000 square feet) the potential for having views blocked are much higher for a unit that is only 15 stories compared to a unit that is 28 stories. After all, one of the reasons people paid such a premium for these Cosmo units is the fact that the views will be protected much more by being that high up.
What is even more interesting is when we compare the sale of this unit to one that just recently sold at the Casey, unit #1602. This true penthouse unit one floor above has similar views. It has 3273 square feet and sold for $2.75million or $840 a square foot….WOW!
Contact Brad Golik at 503-896-8856 or at email@example.com
Visit us at www.LuxuryCondosofPortland.com
See Cosmopolitan views here: http://www.luxurycondosofportland.com/thecosmopolitanportland
Upcoming Penthouse listings
A short time ago I wrote about the possibility of a $6 million penthouse listing that might be coming on the market. The owner loves the unit and is waffling a little whether he should sell it or not. As of this time, the owner is still undecided so I will post more as I hear. If you are looking for a full-floor penthouse in this price range, contact me and I can fill you in on the details.
Today I am writing about another penthouse that will be coming on the market soon. I was originally interviewed to list the property but unfortunately, the owners did not like the numbers I explained to them . I will say, I am usually right more often than wrong on pricing a condo and for this unit, I feel my numbers were very accurate as I have sold 7 of the last 14 units in the building. Of more importance, I sold the unit directly below this unit less than a year ago. The floor plans are identical! The one coming to market is a penthouse unit, so you would pick up about 12 inches of ceiling height. The unit I listed sold was for $1.1 million, and sold for over asking price. The $525 per square foot sales price tied a record of another unit in the building I had sold. For the penthouse listing, I told the owners I was going to push for another record price for the building and gave them my number. They were not satisfied with the number and thought the number should be MUCH higher! Their reasoning was not unusual from what I hear from others…they thought their unit was much better than the unit I sold below theirs and they also thought their unit was way better than another unit that sold in the building for $1.35 million.
From an agents (and a buyers) standpoint, the $1.35 million unit had better river and bridge views. In addition, it had 650 square feet more, and it had a third bedroom. Yet the sellers of this penthouse thought theirs was better and the price should correspond to their thinking. Now the owners did have a couple upgrades in this unit that the others did not. Let’s look at these. The TV was hidden behind a mirror and appeared with the touch of a button…kind of cool in a James Bond kind of way. Another upgrade was a white wood-like tile floor that the sellers really liked. The problem here is that I believe that 90% of potential buyers would rip up the tile and replace with something else, so it’s not really an upgrade. So what are the true values of these “upgrades”? The James Bond hidden TV was probably $3,000 to $5,000. Other than these two things, the unit was essentially the same as the unit that I sold below for $1.1 million. What is the extra 12 inches of ceiling height worth to someone? $50,000? So now we have a premium of $55,000. I told the owners I could sell it for around $1,200,000, maybe a little more. That’s an additional 5% over the number of $1,1550,000. It was not enough!
Now, because I don’t have the listing, I would love to find the buyer because I do love the unit and it’s views, (the photo above is views from the unit) but, at the right price for my client! I am not sure what price the listing agent will come out with, but I know it will be high. As your buyers agent, I will fight to get you a good price on this unit. If you are looking for a beautiful penthouse with amazing views, (The above photos are the views from this unit!) this could be the one! But, only at the right price. I will work to negotiate a good price for you and I know this building better than anyone. If we can’t get you that price, walk away!
If you are looking for a great penthouse unit in Portland, give me a call at 503-896-8856
Brad Golik is a luxury condominium specialist at Pearl District Properties and LuxuryCondosofPortland.com. You can reach him at firstname.lastname@example.org or by phone at 503-896-8856.
Buying a listing?
Have you ever heard the term in real estate “Buying a listing”? What does that mean? Does it mean a a buyer is making the purchase of a listed home? The answer is no! In simple terms buying a listing means that a real estate agent, knowing that he or she are in competition with another agent, tells a seller that the price they should sell their home for is much higher than the supporting comps. It is almost always higher than the price of the agent they are in competition with. For example, agent #1 comes into a listing appointment and presents a sales price that is supported by the comps and the current conditions of the market (ie. Low inventory, high inventory). This agent , for example, tells the sellers that the price should be $900,000. And this agent is pushing the price a little high thinking he can net the sellers a little more because of the current low inventory. Agent #2 comes in, knowing they are competing with another agent, and prices the home at $1,000,000. Now this agent knows the supporting comps show that this home should be priced at $900,000. But this agent also knows that if they come in with a price that is $50,000 to $100,000 over what the other agent said it will sell for, the sellers will be very tempted to go with the second agent. After all, who would not want to make an extra $50,000 to $100,000! What then happens? Well typically, the sellers will get less traffic because most agents know it is overpriced and they will take their chances that the price will be reduced at a later time. When this happens, in this market usually 1 to 3 months later, the listing agent tells the seller that they need to drop their price! And when they do drop the price, the listing has become stale at that point, and regardless of the price drop, the low ball offers start to come in! When this happens, units usually sell at a lower price ( most times lower than the original sales price mentioned by agent #1)
Why do some agents practice this way to solicit listings? Because they KNOW they will get the listing! And during the time the home is on the market, they will have built a relationship with the sellers and at some point, they will have the seller dramatically reduce the price and the home will sell and those agents will get their commission.
So how do you avoid this type of practice? Well start off with the old saying that if something is too good to be true… it usually is. While we all want the most in the sale of our homes, you also want to be realistic in your expectations. And how do we know if an agent practices this habit? Well I often tell sellers to look at the agents current listings because an agent that practices this method of acquiring listings will almost always have a couple of listings that have been on the market for 2 to 3 months (because they were way overpriced!) If it priced right in this low inventory market, It will sell. Anything much over a month to a month and a half is way overpriced. Usually under a month is the norm in this current market.
What do you do if this situation happens to you? I tell sellers to hold their agents feet to the fire! If they say they can sell it for $1,000,000, when another agent says the value is $900,000, hold them to it. $975,000 would be within reason. If they can’t, thank them for their efforts and hire the agent that told you the correct price all along. But when you do, be aware that the original $900,000 may now be difficult to get because of the time spent on the market.
Brad Golik is a condominium specialist with Pearl District Properties. Brad was the first agent in the country to use QR codes for his listings and is an internet marketing expert. Brad was a co-founding partner in Condo10.com , a group of condo specialist from around the country working together to provide the best marketing practices for their clients.