Condo market better in city than 'burbs
COLUMBUS, OH (2008-04-14) For many people the housing market is not the best place to be right now. It's almost inevitable that at least once a day one will hear something about home foreclosures, the credit crunch and the R word - that's recession. In this report, WOSU takes a look at how the nation's economy is affecting the condominium market in Franklin County.
A construction worker cuts a piece of granite just outside an unfinished condominium at Harrison Park. He's about to hand it off to another worker who will glue it to the back splash in the kitchen.
Harrison Park sits on a former industrial site in Columbus's Harrison West.
Eric Casto is the marketing and sales director for Wagenbrenner Development - the group heading up the project. Casto said this particular unit will be ready for occupancy in about a month.
"Has this unit already been sold? Is it a pre-sale? This unit is indeed a pre-sale unit. We put it into contract recently. She was lucky enough to get in in time to make some choices remaining in the unit," Casto said.
Harrison Park has 90 of what the company calls lofts. Two-thirds of the condo-style units are already sold. Casto said the early stages of this project started around 2003. And construction began in 2005.
He said the company was lucky to have started this development when it did - at the tail end of the most recent housing boom.
"We've been extremely fortunate in the sense that we have not been dramatically affected by a sales standpoint, although it keeps you on your toes," Casto said.
Ken Gold is the director of the Center for Real Estate Research and Education at Ohio State University. Gold said he's not surprised that a condominium community in Harrison West is doing so well. He said that's because areas near downtown Columbus are the hot place to be right now. Gold said downtown condos attract young professionals, who are often first-time home buyers, empty-nesters and people new to the city. He said it's condos in the suburbs that will be tough to sell.
"You'll find in a Gahanna there being more condominiums on the market that are available that are typically three years old or younger and there's not a lot of people looking to purchase them," Gold said.
While it may be easier for someone trying to sell a condo in say Victorian Village or Short North, Gold said it's going to take longer - everywhere. But sale prices in the suburbs could suffer.
There are a lot of condos for sell in the Franklin County area. Right now there are about 2,700 on the market. And there are plenty of new developments being built - even in this slow economy. Gold said developers are "optimists." He said they always think they can market their project better than the guy across the street. But Gold said lots of times it's too late for builders to get out of a project - the land's been purchased, the financing is in place. As a result, a lot of condos - especially ones in the suburbs languish in the MLS listings.
Gabe Gayhart knows all too well what it's like to sell a condo in the suburbs. It took him eight months to sell his Reynoldsburg condo when he got married to his wife, Melissa.
"And I had to lower the price a few different times to get people to come in to look at it. And in that period I only had maybe four people look at it," Gayhart said.
When he and his wife got married they each owned a condo. So Gayhart moved into his wife's renovated, one-bedroom unit on Buttles Avenue in Victorian Village. But they want to move to the suburbs. They need more room. She's having a baby. Their condo has been on the market for two months with no offers.
Gayhart's hoping they do not have to lower the price on this condo like he did with his in Reynoldsburg. But they've made an offer on a house.
"And if that moves forward we may have to be a little more aggressive with the sale," Gayhart said.
Neil Rogers is the sales and marketing vice president for Bob Webb Group - a local developer that's been around for about 50 years. Rogers said he too has worked through several economic down times. One of Bob Webb's large condo projects is on Hayden Run Road. Rogers said he's not too worried about the economy affecting their condo sells.
"It's impacting everybody, and I won't deny that. But we've been able to hold our own. We're doing pretty well right now. So I think we figure we've got to weather probably another year to year and a half," Rogers said.
In the meantime, Rogers said they're doing what a lot of builders are doing right now and that's trying to maintain their projects until the economy heads back up again.
"Well, you obviously have to be more aggressive. You've got to watch all your costs more than you did before. You still market, but you pull back a bit. You don't spend the dollars you used to spend when marketing at the top of the market," Rogers said.
For now, it looks like everyone involved in the condo market including developers like Neil Rogers will have little bit longer till they can breathe a sigh of relief.
"But I think when everything shakes out we'll be back on a good track again. You have to look at the news everyday (laughter) you look at it and you go, oh no, not again," Rogers said.