Metrome is a low rise condominium in the Ballpark District. Three specific properties have come up on this blog:
Now the new interesting part, Metrome is still not sold out, the first wave of closings occurred starting in August 2005. Based on normal procedures this would have been the units that were reserved during the construction of the development.
Unit 606, a 994 square foot one bedroom one bath unit closed September 23, 2005 for $550,700 purchase details
Unit 706, also a 994 square foot, one bedroom, one bath unit closes almost a year later on August 17, 2006 for $495,000. Since there were no prior closings on this unit we can assume that this was an unsold unit that the developer has been holding for a year and has cut the price. purchase details
Since condo developments are pretty cookie cutter in the sense that a particular "stack" in the building will be identical with perhaps large patios on the ground floor units and vaulted or higher ceilings for the top floor it's pretty easy to do a comp analysis. These two units are on top of each other so they're virtually identical, in fact the cheaper unit is one floor higher and perhaps even has a better view. Note that Metrome is an eight story building and the two units are on the 6th and 7th floor so there isn't a penthouse premium that skews the analysis.
Assuming unit 606 is worth what the unit above closed for and the usual 6% sales expenses this property is underwater $85,400!
This example clearly shows the risk embedded in purchasing a generic condominium in an unsold out building. As we have seen with the posts on Cortez Blu and The Lodge at Bankers Hill, developers can and will cut the prices to move unsold property.
With so many new buildings completing downtown in the next year or two, many that aren't fully reserved at this point, it will be very interesting to watch how the market digests all these properties.