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Riverwalk Brownstone's success raises hopes for downtown Des Moines home sales

By
Real Estate Agent with RE/MAX Concepts

Downtown Des Moines condo sales have fallen hard with the nationwide real estate slow down a fact which was highlighted in a recent Des Moines Register article entitled "Stagnant condo sales plaugue downtown Des Moines" dated November 19th 2010. The article stated, among other things, that downtown sales were off 75% from their peak in 2006, that only 30 units had closed in 2009, and that 2010 was poised to be only marginally better. In doing a quick check I see that 2010 finished with 29 closed sales out of an inventory of approximately 111. For all you absorption rate folks that's a 3.82 year supply. Pretty dismal on the surface.

Pundits, builders, real estate agents and industry insiders querried variously blamed onerous FHA rules, consumer preference, unemployment, sluggish sales of homes by potential move up buyers, etc. What they really should be blaming is the existing products and stratospheric prices. There are far too many one bedroom and two bedroom units, with the 1 bedrooms priced from $200,000 to $500,000 coming hobbled with association fees in the $250-$775 range. With 3 bedroom, 3 bath, 2 car homes in surrounding areas selling for around $170-$175,000 that's a tough sell on lifestyle alone, even with a full ten year tax break for buying downtown.

But...enter the Riverwalk Brownstones, Hubbell Realty's second phase of the Brownstones on Grand project. The Brownstones on Grand have struggled with the rest of the market. The units pictured above started out at around $450,00- $500,000 in 2006. Five years later the two 9 unit buildings are still not sold out and prices have dropped to as low as $284,900. Hubbell got this only half right, there were too many two bedrooms, even though the units had decent sq. ft., around 2000, they were still too high priced and most lack rooftop access, but for their credit all came with two car garages. Still five remain unsold.

With Riverwalk Brownstones however Hubbell knocked it out of the park and sales are on fire. The three bedroom units (there is a 2 bed option) come with 2.5 baths, a two car garage, granite counter tops, roof top access and importantly, association dues at $150 a month. Add the ten year abatement to that, and it's too good to resist. The Riverwalk phase is being built behind the Brownstone phase and consists of four 4 unit buildings. The first four units are finished and are shown to the right. According to MLS data two units have closed, six are pending and one is active. According to Darla Willett-Rohrssen the listing agent on the project, half of the new units have pre-sold, or have offers prior to the buildings being built. In fact the units are selling so well Hubbell raised prices for the remaining phases which will all likely be BTO or Built To Order. From what I can see the un-built units are not listed but can be sold and will then be placed on the MLS when pending. See a snippet of the MLS data below:

 

 

On a recent blustery 16 degree day crews could be seen hard at work on completing the second and third buildings for which foundations have already been laid.

 

 

 

 

 

 

 

My opinion is that they key to future successes in downtown condo sales such as those Hubbell is experiencing with Riverwalk Brownstones is to keep the prices affordable, around or at under $200,000, offer three bedroom options with two car garages, allow them to be sold FHA and keep the association fees low. Riverwalk may be unique however because these are street level homes where you can walk right out onto the sidewalk, which are not in large supply. Another smart move by Hubbell for this development was to create a website for the association where the  bylaws, budgets, minutes, covenants and more can be reviewed at any time: http://www.hubbellcommunities.com/community/documents.asp?id=5&name=Brownstones%20on%20Grand If you're an agent or buyer who has ever tried to wheedle these basic documents out of a seller to no avail you can really appreciate the convenience this provides.

Hopefully other builders and developers and their agents will take note of Hubbell's success with Riverwalk, stop bemoaning the state of the economy, and start building and offering products people want to buy at prices they can afford.

Data courtesy of Des Moines Area Association of REALTORS covering the period 01/01/10~ 02/03/11.

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