Sunday, June 04, 2006

The AZ Republic Over Reacts Again

In the June 4th AZ Republic article, "High-end condos' low opening bids signal glut" the author cites.....In the June 4th AZ Republic article, "High-end condos' low opening bids signal glut" the author cites the auctioning of condo units at two different communities as "a sure sign that too many high-end condominiums are going up in metropolitan Phoenix."

This is a totally reckless and poorly researched example of journalism. There's no way the "journalist" bothered to visit either The Vale Lofts or Optima Biltmore to determine the underlying problems with those communities before writing the article.

I sell loft and urban style properties for a living. I live, eat, and breath the life style. Yes, we had a ton of investors sweep through the valley over the last couple years and our market has slowed as a result. However, I hardly believe that the problems we're experiencing in those specific communities signal a glut in general.

The architecturally interesting and colorful Vale Lofts has been slow to sell because it's inferior to the competition. The developer stuck it on a crummy lot, apparently cut corners with poor construction and offered ho-hum finishes. It has "urban" design but has a far from urban location. It's not walking distance or even a casual bike ride from anything. Why would someone buy there when they can buy at Orchid House Lofts or Portland Place Lofts or Artisan Lofts on Central or the much older Hayden Place or any one of the many wonderful "in-fill" loft projects throughout the Valley? The Vale would not have sold well to begin with without the benefit of an unusually strong real estate market over the last couple of years. It's now suffering because the competition is so much better. BELIEVE IT OR NOT, INFERIOR PRODUCTS SELL SLOWER THAN SUPERIOR PRODUCTS. This my friends is the same problem with Optima Biltmore.

Optima Biltmore is located in a fantastic area. Unfortunately, the community in general was poorly designed and the amenities are marginal. Even if we had not had a fantastic real estate market it would have sold because of the area. BUT IT WOULD HAVE SOLD MUCH SLOWER AND PRICES WOULD HAVE GONE UP MUCH SLOWER. The investors who bought up as much as 60% of the building bought with the hope of making hundreds of thousands of dollars profit. Well, that ain't going to happen, at least not any time soon. It's no surprise to me that this inferior product is selling slowly but again I don't think that it's fair to say that this signals a general glut in the Phoenix condo market.

I'm not saying that we aren't facing a potential glut in higher end lofts and high rises but I do ask that The Arizona Republic PLEASE dig a little deeper before making gross generalizations supported with unjustified opinion.


Anonymous said...

I live at The Vale and it is actually a pretty cool place to live-
I do agree with everything you wrote- but I think this place will scream in 2 years-
(Especially when the buyers upgrade their condos on their own)

Will Daly said...

JC, I agree with your comments as well. I probably ranted a bit too much about The Vale. I actually love the architecture. I am concerned when I see so much cracking in the stairs and more. I'm not a contractor so I have no business commenting on construction quality. Hats off to you for supporting an architecturally interesting project in our Valley that until recently was predominantly Navajo white stucco and red tile roofs.