An article from earlier today on cnn.com discussed the national condo auction market (it is growing fast) and the incentives provided to move condos nationwide. The issue is that condos take years to develop while condo demand can change very fast. As real estate markets across the country have retracted over the last year, condo developers continue to deliver units that have been on the drawing board for years before the current downturn.
While the announcement of the upcoming condo auction at Brazos Place sent shock waves though the Austin condo market, further analysis has shown that these auctions are increasingly common, and that final prices are not nearly as low as the teaser opening bids suggest.
Here are highlights from the CNN article:
A free Lamborghini in Miami, Florida.
Complimentary housekeeping in Phoenix, Arizona.
Two bedrooms for the price of one in Atlanta, Georgia.
It’s a buyers market again for condominium shoppers after years of artificially high prices and speculation. Marketing gimmicks, along with auctions, upgrades and incentives, continue to be wildly popular for developers desperate to relieve the inventory glut.
“We want to move the products as fast as we can,” said Summer Dunham, marketing manager for Starpointe Communities, which develops luxury condominiums in Scottsdale, Arizona, one of the first states slammed by the nation’s housing crises. “It was very slow in 2008. Everyone had difficulty selling.”
So in February, the determined company auctioned off 20 four-story condominiums overlooking a golf course, private park and three swimming pools against a mountain backdrop. The upscale properties were priced as high as $1.6 million before the market sank.
The auction was declared a success for the company, which sold nearly all of its units in a weak market where only 115 out of nearly 2,000 available units have closed in the first quarter of this year, according to a report by Metrostudy, a research firm tracking the condo market.
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