Could some of the most in-demand housing markets be cooling off?
Urban Chic Sells in St. Louis
Conrad Properties’ success with an urban-chic product in the urban-suburban location suggests huge pent-up demand for that type of product in a number of mature markets.
In Southern California or Florida, the market for new luxury condominiums might be strong enough to match the opening-day pre-sale such as the one held by Conrad Properties in April. But for the St. Louis market, which supports only 150 to 200 condo sales per year, first-day sales at the 100-unit Maryland Walk project in Clayton, Mo., surpassed even the most optimistic projections.
Conrad’s success with an urban-chic product in the urban-suburban location suggests huge pent-up demand for that type of product not only in St. Louis but also in any number of mature markets.
For condos priced from the mid-$300,000s to $1.4 million, Conrad received 42 reservations secured with $5,000 down payments. The next day it took 10 more reservations. Within a month, the firm had 50 signed contracts, says Wendy Timm, Conrad’s chief financial and chief operating officer.
"There is no precedent at all for pre-sales in St. Louis," Timm says. "It just does not happen. And you cannot expect that in a market like this, which does not have the depth of an urban core, buyers will commit to this type of product and put up earnest money for a project that is two years from being delivered."
Timm says the marketing strategy played the urban theme to the hilt. The marketing tag line "Walking the Walk" tied in with the development’s location only steps from one of the region’s most fashionable shopping and eating districts along Maryland Avenue. Units on floors one through nine were marketed as "boulevard homes." Floors 10 through 15 hold "parkway residences."
Prepared for a long pre-sales process, Conrad held back on advertising and promotion until only two weeks before the April 26 pre-sale. Company officials knew they were on to something when 200 quickly joined the interest list. Those prospects were invited to a breakfast buying opportunity just before the noon public opening. But the breakfast, at a nearby hotel, "kind of melded together" with the public opening, Timm says.
"When all of the commotion inside became apparent to those waiting outside, we had a number of people just walk in early," she says.