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.