High Rise and Loft Condo Sales Jump in 2009

I just dug through some more MLS data.  As I’m sure all our readers would expect, the number of high-rise and loft foreclosures and short sales were way up this last year.

From January 1 to December 31, 2008, the total number of “distressed” sales of high-rise condos and lofts was 94.  These 94 properties took an average of 143 days to sell and the average price per square foot for these sales was $222.72.

For the same period in 2009, the total number of high-rise condominiums and lofts which were advertised as being a short sale or foreclosure was 262 units (a 280% increase)!  These 262 properties took an average of 75 days to sell (almost half the time as 2008) and sold for an average of $176.54 per square foot (21% less than in 2008).

Currently there are 104 distressed urban condos on the MLS for sale.  Of these, the average advertised price per square foot is $189.92 and have been on the market for an average of 150 days.  In my opinion, this higher number of “days on market” is irrelevant since the last three months of the year are typically slow due to the holidays.  I expect to see quite a bit of “market activity”/sales beginning in mid to late January.

So what do all these numbers mean?

Well clearly more people purchased in 2009 than 2008 and the speed by which condos sold is very similar to what we saw BEFORE the boom; meaning that sales velocity is comparable to what we see in a NORMAL market.  Now granted, these sales were of foreclosures but so what?  This simply means that after the crazy appreciation and subsequent bust, that prices now make sense to buyers; to the point that buyers are snapping them up at rates comparable to before the boom.

Oh, and just to clarify something.  I am looking at sales velocity to determine market strength vs total sales numbers because prior to the boom, very few high-rise and loft condos existed.  Think about it, prior to 2004, there were only two modern high-rise buildings (Crystal Point and Esplanade Place), four older high-rise buildings (Executive Towers, Regency House, Embassy and Phoenix Towers Co-Op) and a smattering of lofts.  So, to determine whether sales numbers today are comparable to pre-boom levels is kinda tough.  If any mathematically brilliant people are reading this and have suggestions, I’m opening to hearing them.  :-)

About the author

Will Daly Will Daly has specialized in selling and leasing high rise condos and other urban property since 1997... before urban was "in" in Phoenix. His company, We Know Urban Realty has helped more urban buyers, sellers, renters and landlords than any other real estate office in Phoenix. Connect with . If you are ready to talk to an agent about the Urban Lifestyle Click Here

30 thoughts on “High Rise and Loft Condo Sales Jump in 2009
tauros

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tauros

I am so much excited because it is very funny and effective article. It is not any simple information about on weknowurban.

Bay Window Curtains

Wow! Great post about sale condos. Nowadays, all prices goes up and nothing went down during recession period. Thanks for sharing this.

Investment Tips

Like your enthusiasm. If anyone has any money left now would certainly be a good time to invest.

MauiRealtor

Do you feel that the end of the 8000 tax credit will hurt your market? You have not posted stats for a while, but it would be interesting to hear your input given today’s circumstances in the phoenix area.

franchise

very high cost advertising nowadays.. everyday the price going higher and higher… :D

Ersatzteil

Hmm it means 2009 is a good year for you and i hope you will also get good rise in 2010.

Will Daly
Will Daly

Jay – maybe you’re right, we will see. However, your opinion doesn’t take into account the fact that lending guidelines have been scewed against condo buyers for over two years now. Additionally, because of the poor financial condition of many HOA’s it’s impossible to get loans in those communities. So even with those two big strikes, we are seeing sales and velocity up.

What data have you seen that supports your claim that “there are very few occupancy buyers”? I’m not saying it doesn’t exist but I sure haven’t seen it. Our experience is just the opposite of your claim. We are selling properties to what we call “owner occs” meaning folks who intend to live in/occupy the property. Yes, there are investors too but with underwriting guidelines so tight it’s super hard for investors to buy high rise condos; I’m not saying it isn’t happening I’m just saying that I think you are understating the number of owner occs participating in the market. Also we see strong evidence that downtown Phoenix is a desireable place to live AND becoming more desireable. People do want to live there. However, they have not bought there until now because the prices were so high. Sounds like a free market at work.

Incentives? Yes they exist and they are influencing the market. I am very concerned about the affects of rising interest rates and have written candidly on the topic. But I also know that many people have been waiting on the side lines 3-4 years to buy and some of them feel comfortable enough now to move forward.

We do NOT tell our clients that we are at the bottom of the market. We tell them that we believe we are at or near the bottom but that we don’t know for sure and that we don’t think anyone knows for sure. However, for people who want to make a change now, who want to take advantage of the lower interest rates and expect to “buy and hold” for five or more years that this MIGHT be a good time for them to buy.

You can still argue that the market will take a “big” hit this summer. Frankly, I don’t think anyone truly knows what will happen and when; not even the vaunted economists that you seem to follow. Heck, I have yet to find an economist that hits projections dead on. I don’t think that it is possible to know what and when something will happen today given the enormous size and complexity of our economy.

You have called people here names (e.g. “bubble-headed delusional optimists”). I suspect that this is an expression of your anger, fear or frustration with the market, the economy, our government or whatever. I too am frustrated. And who knows, maybe you are right with your predictions? But until I actually see that, I’m going to take data, do the best I can to understand it and give my opinion…without calling people derogatory names.

Jay Moh

Wow. Please excuse my fankness, but what a bunch of bubble-headed delusional optimists (including the article itself).

Only long-term investments are safe right now. The problem with Phoenix downtown is that there are SO many shorts and foreclosures, and SO many investors and owners who are now renting out their places, that prices are continuing to fall.

If you own a car lot, and you are selling cars at a loss, and you see MORE cars at a loss this month than last month, that is NOT a good thing. WTF is wrong with you people?

There are multiple issues that are going to take the froth off this mini-investor snatch bubble that is going on right now; The end of 1st time home buyer tax credit, the end of the fed MBS buy-backs near end of March, and the new FHA condo requirements that are coming out. This market is completely artificially stimulated. There are very very very few occupancy buyers out there right now for the downtown condo market.

I would expect the downtown condo market to take a BIG hit come this summer. Prices will go stable in 2011, NOT 2010, and then will go nowhere until a real job recovery happens, which is currently projected by respected, professional, economists to not happen until “2014 or later”.

boring

I am seeing that in my area, and was just curious how other markets were dealing with the changing real estate landscape.

Ryan

As condo sales continue to rise, they will begin to be used as rentals. There are some great websites out there where you can rent a condo.

BD Web Development

Its a Bangladeshi Web Developing Blog.

ryan

As condo sales continue to rise, they will begin to be used as rentals. There are some great websites out there where you can <a href="http://www.BigCityApartments.com&quot; rent a condo .

drainage systems

Thanks for posting, was a great read!

mafia wars tips guid

These figures are really going to help
me with some data I’ve been anaylizing.

Wayne Pruner

I’m glad your condo sales are picking up down there. Condo sales are pretty bleak up here, but we do not have near as many foreclosures. Many condos are converting to apartments.

finance articles

I like your articles and views. I will reflect on this issue.

gochi

Wow, everything more than doubled since 2008, despite the economic crunch. I hope it continues well into 2010. But is the lower selling price per square foot in 2009 compared to 2008 a good sign?

Kathy Anderson

Good to hear! I think 2010 is going to be a great year for Sun City Grand sales as well. Our inventories are at an all time low and with the Canadians coming back into the market with cash sales are looking promising.

Mortgage Girl

Great Post, Thank you for sharing that valuable data.
Although based in Canada we find those figures very useful.

Free Loan Mod

Everyone who is not broke from our current economy seems to be jumping at all the amazing deals out there on real estate. While this market is terrible for homeowners and sellers, buyers are reaping all the rewards

Design2Express

Hmm it means 2009 is a good year for you and i hope you will also get good rise in 2010.

Dentist in Florence SC

Ditto, WOW. That is a huge jump. You guys are definitely bucking the national trends. In many areas, cash is the only option to pay. There have been so many foreclosures that financial institutions are very hesitant to loan on townhouses and condo. It is nice to hear that some areas are picking up. Nice to have hope on the horizon. Congrats to Phoenix. I hear it’s a beautiful place to live.

Realhomesestate

What a nice post you have shared! I’m sure that 2010 will be a big boom in terms of home sales. What do you think? This is also with the help of first time home buyers and the on going tax credit law. having a big increased means getting into a more productive side of marketing real estate. Keep up the good and informative article!

SEO Enterprises

While I do agree with your analysis above regarding the sales velocity is that of a market pre boom. I do think there will be a second leg down in the major foreclosure markets. Namely Arizona, Nevada and California. This second leg down will be attributed to the foreclosure moratoriums that were enacted a few months ago aimed at stemming the tide of foreclosures. Many of the people who were going into foreclosure are still going through this process because they are still severely underwater. This moratorium is graduating the downward slide of house prices and therefore lengthening the time and flattening out the slope of the decline. We will just have to wait and see.

property in alanya

informative writing. thanks

Sam Star

Before the boom means before prices have gone crazy? But your point that people can make sense of the current prices seems like a very viable statement. They expect to get value for money now. However I also think that there are many people who are hoping for a rise in prices so they can sale the condos they have bought during this low.

Will Fowler

Well that’s gotta make for a rough time being in real estate. Do you foresee 2010 will be better in the real estate market. -will

vivere all'estero

Congratulations on your article very interesting. in Italy there were many failures, real estate, and I personally am a little discouraged

Logan Homes For Sale

Wow, 280% increase is huge, is it because of the first time home buyers you think? You said that there were only a couple high rise condo buildings in 2004, do you think the developers knew the market was going to be filled with the lower end buyers so they build more condo buildings in your area?

I am seeing that in my area, and was just curious how other markets were dealing with the changing real estate landscape.

Comments are closed.