I got a call from an appraiser this past weekend asking me this very question, as she was working on appraising a condo in downtown Columbia. More specifically, the question was "Why are the values going down?" My answer was simple: Supply and Demand. In the last several years, the downtown Columbia area has seen an explosion of new construction and renovation condo projects. Initially, sales were good, despite some prices exceeding $250/sqft. A popular target market was game day fans---seasonal visitors for a handful of football games a year. Then, the market began to fall, auctions were held, and sales seemed to have dried up. Here we are in the 2nd quarter of 2009, and new construction sales of condos are still struggling. So what is one to do? It is said that "only the strong survive." This holds true in the real estate industry as well. So this is what I'm doing to survive....
1) Align yourself with a strong product. Then sell it.
My client is The Gates at Williams Brice. www.thegatesatwb.com We are nearly 80% sold out. Why is this? Better price point. Full appointments such as granite, tile, trim, appliances, ect. More amenities. Basically, you're offering more for your buyer's $$. Did I mention The Gates is paying a 5% Co-Broke? Must be present on 6/13/09. All other sales paid at 4% co-broke.
2) Know the market. Then exceed the market's expectations.
"Affordable Housing" in downtown Columbia typically begins in the $170K and up range for single family homes. For condos, this price goes up to about the $200K range and up. This price point can increase even more if you're speaking of a NEW condo. The Gates at Williams Brice is now exceeding these expectations.
June 13, 2009 Noon-5pm @ 1085 Shop Road, Columbia, SC 29201. The developer is hosting its FINAL CLOSEOUT EVENT. All remaining 27 condos will be sold at INVESTOR prices. No, really. The new pricing will be quite surprising and will "wow" your buyer if they know what typical prices should be in downtown. The new pricing exceeds any pricing previously offered by a developer for new, luxury condominium units in the Columbia market.
If they are not sufficiently "wowed" they will be once they find out that they can receive up to additional 6% in buyer incentives.* Per lender approval. But wait.....there's more to come later.
3) Let everyone know. And I mean EVERYONE.
Eblast it. Blog it. Post it. You never know where the next deal may come from. It's easier to sell a GREAT DEAL even in this market.