The article mentions appreciation from the Case-Shiller home price index over the past three years. Additionally historically low mortgage rates and very favorable housing affordability rates are very positive factors in this market.
The article goes on to quote several new construction sales agents. They are bullish about the past 12 months sales in their buildings and their sales forecasts. These must be taken with a grain of salt. Perhaps things are selling briskly where they are at, but when I hear about new construction I always consider that some of it may be puffery on the part of agents.
My experience in the market is that downtown homes are selling, buyers are just looking for that very very good deal. More specifically, buyers in this market feel like they are still taking quite a risk buying and want to feel they are getting something special. With the large amount of available inventory, sellers best tools are the marketing their agent is doing and price.
In the Joffrey Tower, there are two big factors at work now. First, homeowners in the building recently received their tax bills. These differed wildly from what they have been paying. The last few installments were the underdeveloped value of the property before the building was constructed. This was several hundred dollars whereas some of the two bedroom condos now have tax bills of $8,000 or more. Additionally, the status of the building's litigation with the developer was dragging on sales. Banks were not approving loans in the building while the gray cloud of litigation floated over the building. I recently got word from a developer contact that this has been settled, but I am waiting to hear back from the building manager. Settling this litigation would really improve the sales picture at 8 East Randolph.
