Amid news of foreclosures, tightening credit and housing sale slumps, Downtown residential developers are still building and people are still renting, though not buying as much, according to speakers at the ONB monthly breakfast meeting.
ONB President Michael Calvert said that condo sales have indeed slowed. “But Birmingham outperforms the nation, and Downtown outperforms the (Birmingham) area, generally.
Developers and real estate agents have to be a little more creative about moving their still-vacant units under today’s current conditions, said an Atlanta marketer for the half-full City Federal Condos.
“Where are the buyers of today? Online – that’s where you have emerging opportunities,” said Uri Vaknin said of the Marketing Directors LLC. “You have to do e-marketing through social networking such as Facebook and MySpace. You have to do geo-tracking and go directly to the folks you want to reach, and figure out how to appeal to them.”
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ut-of-the box marketing, plus developer incentives such as holding the notes, down-payment assistance, are ways to attract buyers, Vaknin said. Sellers might even pay the house note for a potential urban dweller who wants to live Downtown, but are afraid their houses in the suburbs won’t move fast enough or sell high enough in today’s buyers’ market.
Motivate real estate agents by giving them a $5,000 bonus for bringing people to your condos, as the City Federal developers are offering, Vaknin said.
“The old way to sell (downtown) condos will not work. You have to make the sale easy.”
More than Half Full
ONB reports show that 83 percent of lofts available for sale have been sold and 91 percent of rental units are rented.
Despite the apparent housing slump nationwide, Vaknin said the problem in Birmingham isn’t as bad as people here make it out to be.
“People say they (developers) have overbuilt in Downtown. But 84 (empty) units is not so bad. In Atlanta, you’ve got more than 5,000,” he said. Compared to Atlanta, other markets where housing sales are down much more sharply, Birmingham is doing well. “We remain very bullish on the condo market here in Birmingham, and that’s not just ONB boosterism.”
If Vaknin is bullish on condo sales, developer Tom Carruthers is even more optimistic about condo and loft rentals.
His company is currently refurbishing the Burger-Phillips Department Store building on Third Avenue North between 18th and 19th Streets for 35 lofts for rent. “We are doing virtually no marketing, yet we get phone calls from people wanting updates on the property,’ he said. “Fifty to 60 percent of them are moving here from out of town.”
Downtown and Southside loft and condo developments with units that sell for more than $250,000 are sitting vacant. But every unit less than that amount, in those same developments, are virtually all sold. And few developers have problems renting lower-priced units. “I think there is a very strong rental market and for moderately priced condos,” Carruthers said.
The reason for the continued optimism despite the market slow down are the demographic trends, said ONB President Michael Calvert.
He said the fastest growing segment of today’s population are the 20-year-olds and 30-year-olds who typically are putting off marriage, and the empty-nest baby-boomers who want to leave the big suburban house for a cool in-town spot. Neither group tend to have children, so schools are not an issue for them.
The millennials and the boomers are the biggest buyers and renters of downtown lofts and condos nationwide, at 60 percent and 35 percent respectively.
“The future of downtown urban living is excellent,” Calvert said. Developers in Birmingham seem to think so too, judging by the confidence of developers like Carruthers who’s spending $6 million on his project and Robert Simon of One Residential who’s building a $33 million apartment-and-residential complex with 250 units in the 100 block of 20th Street South.
“We are optimistic about the future of Downtown living as a national trend. Urban living is here to stay in Birmingham just as it is in downtowns across the country.”
