As many of you know by now, Pearl District Properties has shut it’s doors. I am still in the Pearl District and now at Total Property Resources!
Brad Golik is a condominium specialist working in Portland’s Pearl District, Downtown and South Waterfront.
Last night I listed a penthouse unit at The Elizabeth. If you are in the market for an amazing place in the heart of the Pearl District…check out the video: http://video214.com/play/7vdRuUinppTpWTplmLajfg/s/dark
For a private showing, please call Brad Golik at 503-896-8856
Today, like I do on most Tuesday’s, I went to a few brokers’ open houses to look at some new listings. After viewing a new penthouse on the market, I stopped in at a nearby coffee shop. In the coffee shop were a group of real estate agents who had also gone to the same open house. These agents were not condo agents, I know because I did not recognize any of them! What I heard come out of the mouth was not surprising because they just do not understand the urban market. The penthouse that these agents were talking about was the new listing at the Crane building priced at $1,850,000. I heard on of the agents say that she has not seen any of the other penthouses in the Pearl but she thought this one was “Exceptional and priced very well!” The others with her nodded their heads in agreement. The first thought that came to my had was…REALLY?…Is this what they would say to potential buyers that they would show the unit to?
For what it is worth, here are my thoughts on this penthouse unit priced at $1,850,000. This unit was on the market one and a half years ago priced at $1,950,000 and it did not sell then. While this unit has very nice finishes, here are my reasons why I think it is priced too high. First…and most important, anything priced above $1,500,000 should not be a total fishbowl…and this unit is! Before when it was listed, you had neighbors from Avenue lofts and Irving Street lofts looking down into your 7th floor unit. Now, directly across the street to the west is a brand new office tower that takes away your views of the west hills, takes away a lot of natural daylight and also adds hundreds of office workers that can now look directly into your unit! There MUST be a discount on price for the huge lack of privacy!
Some of the other negatives of this unit are that it has low ceiling height and it is a pretty choppy floor plan which gives you the feel that it is smaller than its 2239 square feet. At 836 a square foot, a buyer should get way more for their money than what is offered here. In one of my recent posts I discussed the great buy my client got on a penthouse purchase at The Elizabeth. This unit closed at $2,200,000 (fully furnished) or $667 a square foot. This unit is far superior than the penthouse at the Crane building in many, many ways. It is a much higher floor, 14 as opposed to 7 so you are above most surrounding buildings and don’t have neighbors looking down on you (something most penthouse buyers NEVER want!) The floor plan at the Elizabeth was much more desirable. In addition, both units had equal deck space for outdoor living but at the Crane penthouse, the outdoor space is almost unusable because of the freeway noise that is only a block away! Even if my client would have gotten the Elizabeth penthouse at a higher price, say $2,500,000, the price per square foot would still have been much lower at $757 a foot. There is a huge difference in why the buyers at The Cosmopolitan are paying above $800 a square foot…that is the privacy that comes with being 25 floors or higher. Your odds of having another building going up next to you and blocking your views are much less, this is why buyers were willing to pay a premium. But, the Crane penthouse being only 7 floors up, there is no way it deserves the premium of pricing that it is at, especially with all of those new office workers looking down at you!. If I am the listing agent of this penthouse, I am hoping that one of those agents at the coffee shop brings a buyer and makes an offer… because, based on their comments, they truly don’t know any better!
So you’ve decided that you are ready to sell your condominium. The next step is deciding what real estate agent you should use to help you sell it. One thing I see happen over and over again are the seller’s using the same agent that helped them buy the unit originally. Is this a good or bad idea? You are thinking that when you bought the unit, the transaction was reasonably smooth so you want to use the same agent. Again, is this a good idea or bad? The answer… it depends!
The factors you should consider when selling your unit are very important because buying is very different than selling. One of the most important factors is whether or not the agent is a condominium specialist or not. Should you hire an agent that is not a condo specialist? My answer is NO! And the reason is simple… these agents just do not know the condo market! Most important, and this is a big one, their day to day marketing does NOT cater to condo buyers. As a condo specialist, my marketing is targeted to condo buyers EVERY SINGLE DAY! This is IMPORTANT! A typical agent can not just flip a switch and fill their pipeline with condo buyers. Typically, they spend one day in Beaverton and the next in Lake Oswego. It is very hard to be an expert in the entire city. Actually, it is impossible! That is why I specialize. So I can be the best that I can be and truly understand my market.
Knowing your market is very important for a listing agent. What I see often from agents that do not spend time with condos, is a lack of understanding of pricing. I will be honest, if you were looking to sell a house in the Alameda area of Portland… I am not your guy! Why? Because I don’t understand the market as well as someone that works that area. Pricing can be substantially different in that area by being 1 to 2 blocks off of certain streets. Same goes with condos. I get calls all of the time from “suburb” agents trying to pick my brain on pricing because they know I have done a lot of condos and know the market. Do I like to get these calls? Absolutely not! It is very frustrating to see a seller put their trust into an agent that does not understand the market. To make it even worse, I go crazy when I see that same agent get the listing and don’t use professional photos to market the condo! It happens EVERYDAY, and it is usually because the seller was comfortable with the agent when they bought the place. So is this the right agent to list and sell your condo? Definitely not.
If you have read my blog for any length of time, you have probably heard me say “Any agent can sell your place…but at what price?” This is so true. I am a firm believer that good marketing makes a difference. It works for NIKE, Coca Cola, and Johnson & Johnson. Why do they continue marketing like they do? Because it works! Buyer’s are willing to pay more for something that is presented in a nicer way. Same can be done in real estate. If you can make a sub par listing look better than it is, you will get more people through the door. If a lazy or cheap agent does not pay for professional photos, the chances are the condo will not look as good as it could and it will lead to less people coming through the doors to look at it and in turn, the seller will get lower offers.
Now let’s say that original agent also does a fair amount of condos. All I need to say here is look at the previous paragraph! Marketing matters!
When you write in a blog, sometimes you will make statements that are right and other times you may be wrong. This is the risk that you make when you put yourself out there. At times I will mention that I think a unit that comes on the market might be overpriced, underpriced or priced just right. In the case of the new Cosmopolitan, the market has spoken! From the very beginning, I have said that I felt the Cosmopolitan was overpriced. Was I wrong? Well, the Cosmo is now about 85% sold out. The market has absorbed those high prices, prices that I mentioned were higher than Seattle’s Insignia development. How could I be so wrong? For the developer, Hoyt Street Properties, their timing was the perfect storm, in a good way. Not only did interest rates not go up as many have feared, they actually went down. The biggest reason the developer was able to capture these high prices… LACK of INVENTORY. This is where I was dead wrong in predicting what would happen in the market. I don’t believe anybody would have guessed we would have continued with the low inventory that we have continued to have.
Typically, as prices rise, owners who were underwater begin to see some equity and sell as prices begin to go up. This time around, it has not happened! This was the perfect storm for Hoyt. In regards to pricing, it really is the market that determines the price. Because buyers had no other options, they were forced to pay the high prices at The Cosmopolitan. In doing so, the developer never had to reduce prices like I thought they were going to need to do. So was I wrong in my saying they were priced too high? I am sticking to my guns in terms of my opinion on pricing. Again, I don’t determine prices nor does the developer, it is the market. Is Portland ready for $1000 a square foot prices? I still don’t believe so. Several agents have tried pricing a couple nice penthouses in town at the $1000 a ft. level and they are not selling. The real determination of pricing will come when these units go into the resale market. This has been my biggest fear in not wanting to put my clients in this building. While some are certainly willing to take that risk, it is hard to determine what the market will do between now and then. What I do believe though, is if the market were to turn around, I believe it will be very difficult to get the $800 to $1200 a sq. ft that the buyers paid. When things aren’t shiny and new it is more difficult. Will the extra height of the building justify those prices then? I am not so sure. The new Overton apartment building, which is slated for 26 floors, takes away some of the theory of not getting views blocked by being in a 28 story tower.
So was I wrong on pricing? Like I said, the market has spoken and the developer has won! However, somebody asked me the other day if my parents moved up from San Diego, would I sell them a unit there? My answer… NO! I would do exactly what I said was an option early on. I would rather find them a nice unit at The Metropolitan, Park Place, The Henry or The Casey at $600 to $800 a sq. ft and have them put $100,000 to $150,000 into it. That way they would have the dream kitchen they want (which is not ultra contemporary) and they could do some other things to make it exactly how they want it. They could have a unit that I believe would far exceed, in terms of finishes and design, what they would be getting at the Cosmopolitan. And not that the ultra contemporary finishes at the Cosmopolitan are not nice, Pedini cabinets, your only choice, are just not for everybody’s taste.
To finish up I want to add just one thing. Everybody that is buying at The Cosmopolitan is not just buying an investment, they are buying their new home that they plan on living in for many years. So for those people who don’t have plans or need to sell anytime soon, they will be living in a very nice building in a very nice part of the Pearl District. They will be in a building that offers many nice views and a building near several close by parks…it will be a nice place to call home!
Brad Golik is a condominium specialist with Pearl District Properties. I you are thinking about listing your Portland condominium, give Brad a call and learn about Portland’s best condo marketing program.
503-896-8856 l WWW.LuxuryCondosofPortland.com
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.
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 Penthouse, Portland Town Homes, Portland Highrises, upscale buildings including The Casey, The Metropolitan, Park Place, The Henry, The Westerly and many more!
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!
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
Back in March I wrote about a luxury condo that came on the market that I said was “way” overpriced. In fact. I took a little heat for my comments about that listing! This particular condo at The Casey came on the market for $1,699,901. When I ran my comps on that unit at the time the market value I had was $1,350,000. In my article I wrote about the potential problems with overpricing a unit so much. What I said what would probably happen is that the condo would stay on the market for awhile with little to no showings and then the agent would have the owner drop it $100,000. That would still not be enough so they would again drop it another $100,000. Then what would probably happen is it will get “Stale” on the market and when it does get an offer it will be a lowball offer!
Here is what actually happened with that condo:
It was originally priced at $1,699,901. After a month of no interest, the owner dropped the price $100,000. After another month had passed, and no interest, the agent had the owner drop the price another $100,000…now down to $1,499,000. After another couple months they finally got an offer ( yes a lowball offer) and it closed finally after 6 months on the market at $1,315,000, or another $184,000 off of the most recent list price!
Now I didn’t have a crystal ball that told me exactly what was going to happen, but I have been in business long enough to know that this was a classic overpricing and you could just feel what was going to happen. At the time it originally came on the market, inventory was low. While I said the market value was $1,350,000, the owner probably could have pushed the price to $1,400,000 and ended somewhere between that number and $1,350,000. While the owner, at the end accepted an offer for $1,315,000, his end number was actually worse because of his cost to carry. While it was on the market for 6 months, he still had to pay property taxes ($916/mo.) HOA fees ( $1,067/mo.) and mortgage payments ($5,000/mo.) total additional cost of $41,900 netting him an actual number of $1,273,100 before actual closing costs.
As a good listing agent, I always want to maximize the total return to the seller and I will always try to push the price for my clients. I am not an agent that promotes “SOLD in 2 days!” because that in my eyes is not always a positive! There is a fine line between pushing the price a little and overpricing a unit. In pushing the price a little, this is almost always a case by case situation depending on the listing and the timing of the market. More often than not, an excessive overpricing usually leads to a number well below the market value of where it should have sold!
The other comment I would like to make in regards to overpricing, if you are going to push the price a little, make sure that you have GREAT marketing. This starts with great professional photos and much, much more. Nothing is more frustrating then seeing a condo that is overpriced and has lousy marketing. At least with really good marketing you will increase the traffic to your listing and increase the probability of getting a better offer.
If you would like to know what the value of you condo is in today’s market CLICK HERE. Or give a call today to Brad Golik, Portland’s condo specialist! 503-896-8856
The other day I was at meeting with many other fellow real estate agents and overheard one of the agents talking to a group of other agents. Here is what she said: “I am so tired of people not considering us as professionals and viewing us 1 step above a car salesman!” I found this to be very interesting and only supported a belief that I have, and that is the fact that many agents are not very professional! As I looked at this person, one thing instantly came to my mind. Here she was at a “professionals” meeting and she was wearing jeans and looking anything but professional, as were about 3/4 of the agents there.. ( Have you ever watched House Hunters on HGTV? Many times you will see the same thing!) The second thing that came to my mind was the fact that I had just taken my car for an oil change at the Cadillac dealership. While there, I noticed the salesman. Every one of them had a suit and tie on!
The point I want to touch on here is if you want to be considered a professional, then act like one. No, wearing a suit does not make you a professional, but it is certainly a step in the right direction. The funny thing about the real estate business is that you have many different types and quality of real estate agents. The true professionals (usually dress everyday like they may meet a potential client that day) make a point to learn the business. They understand contracts, learn strong negotiation skills, have strong marketing skills. In other words, they take the time and make the effort to become a true “Professional”. Last week I went to view a million dollar condo for a client. I was pretty shocked when I showed up to see the listing agent in jeans who was trying to sell a million dollar condo. Again…a suit does not make you a professional but come on people. You want people to consider our profession as professional, start acting like it. You do have cultures within companies like Nike and Intel where it is appropriate to dress more casual, but we are not Nike and Intel.
There are over 8,000 real estate agents in the Portland area. Many more are becoming agents because they think it is an easy profession to make money in. (and they will soon learn how wrong they are.) Many of these agents are part time agents ( though you will NEVER hear that from their mouths!) It is very difficult to be a professional at anything unless you are giving it a majority of your time and you are spending that time to improve your skills.
If you are a seller or a buyer of a new home… hire a professional! If you are looking to buy or sell a condo, I would love the opportunity to interview for the job! If you are in the suburbs and looking for a “Professional” agent, give me a call and I will gladly direct you to a true professional.
Here is my take on professionalism in the real estate business. Professionals are good at what they do and they are worth every penny they charge! The ones who are not, and I believe that is a majority, can cost you plenty in a transaction.
It pays to hire a true professional!
Portland Condominium Specialist
Here is a partial list of condo sales from downtown, Pearl to South Waterfront: