What’s on the Horizon for Brand New High Rise Condos?

There are several large high rise condo buildings about to complete construction and “be delivered” in the next several months in Phoenix and Tempe. These are all gorgeous projects and we’re excited to see them completed. We also believe that they will truly add to the urban experience in the Valley as a whole.

We do have one concern however. How many buyers do these buildings really have and of the existing contracts how many buyers will actually close their purchase. Afterall, we have to believe that many of the contracts were written prior to the beginning of construction, or shortly thereafter, which means that the contract price was established during “the boom.”

IF this is correct then how many buyers will want to close a purchase in 2008 at a price that was established in 2005 (for example)? Certainly the more earnest money the buyer has to lose the higher the likelihood the buyer will close. This is why TYPICALLY high rise developers require earnest money equalling 20% of the purchase price. I have even seen 30%. Unfortunately, some of the buildings coming on line now only required 5 to 10% earnest money.

In your opinions, have prices for high rise condos gone down more than 5 – 10% over the last two to three years and if so, how might this affect the success of these projects?

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One thought on “What’s on the Horizon for Brand New High Rise Condos?

I was talking to my neighbor and she is trying to sell her condo by owner. She is asking for 315k but said a lot of people are offering 250k. That appears to be the sweet spot especially for most of us working class out there. I think the downside right now is a lot of high doller condos are finishing up and coming to the market at the same time. How many 700k + can you possibly sell here in DT Tempe in this market. Its to bad though because these places are beyond cool. The upside is that once lightrail is operational and people realize DT living is a great option I think these areas will take off. Especially with high gas prices and long commutes. Its great you can find a bargain house in Buckeye and QC but who wants to deal with the commute and buying gas. Urban sprawl is coming to an end and gas will be the reason why. I hope they will continue to build these great buildings in these DT areas. I just wish they would shoot for a more reasonable price range. eg 250k-600k etc. It will be interesting to see how gas prices effect people buying way out there. My projections are that SUV/Pickup sales are going to drop and no matter how good of a deal you get on a house in the outskirts you will think twice. Houses closer to work centers will maintain their values and condos and high rises will continue to be good options. One last thing – if you like going to the bars then between the gas prices and the dui laws who can do that. Time to change zoning to allow your neighborhood Cheers and since we know that is not going to happen its time to move to DT Tempe, Scottsdale, Phoenix 🙂

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