Ethan Hyman - ehyman@newsobserver.com
West, a 17-story condominium complex in downtown Raleigh, has 24 of its 170 units left to sell. The economy forced West and the Quorum Center to resort to auctions to reduce inventory.
To say it has been a rough couple of years for the downtown Raleigh condominium market would be, well, a considerable understatement.
Two downtown projects, West and the Quorum Center, were forced to resort to auctions to reduce inventory, while a third, Bloomsbury Estates, was sold on the cheap to a Florida company that promptly slashed prices so low that the remaining units sold out in a matter of months.
While these events inflicted plenty of pain on both developers and anyone who bought a condo before 2009, they also had the effect of accelerating the market's race to the bottom.
Think of it as the real estate equivalent of ripping a Band-Aid off in one fell swoop. Sure, it hurt intensely while it was occurring, but it also set the stage for market prices to - gasp - finally stabilize.
There are now 53 new condos left to be sold at the four downtown projects built before the market crashed: RBC Plaza, 222 Glenwood, West and Quorum Center. A fifth, Hue, was turned into rentals, a conversion that surely spared the market from even more severe price declines.
Based on the recent pace of condo sales, it's conceivable that the remaining new units will be sold by summertime. After that, the only option for people seeking a downtown condo will be to purchase one that's been previously occupied.
And that is likely to remain the case for years to come. Given recent history, and the fact that banks now flinch at the mere mention of the word "condo," it is highly unlikely that any new projects will be built in the downtown area for at least another five years.
"I think we're turning the corner," said Ted Reynolds, who developed the Quorum Center along with his son, David. "We're not there, but the last three or four years have been rugged. The very fact that we're still here, ... we've got an awful lot to be thankful for."
The Reynoldses have sold all but five of the 37 units in the Quorum Center. One of those units sold for $1.05 million in mid-2010 - surely among the most ever paid for a downtown condo.
But anemic sales eventually forced the Reynoldses to auction off several units in March. The last recorded sale was in May.
The recent fire sale at the Bloomsbury has been particularly bad for the Quorum Center, RBC Plaza and 222 Glenwood - projects that generally have resisted trying to match the low prices offered at Bloomsbury and West.
One Bloomsbury unit sold two weeks ago for $166,000, or about $189 a square foot. That's more than $100 per square foot less than the first Bloomsbury buyer paid a little less than two years ago.
"They're all gone, thank heavens," Reynolds said. "They sure gutted the market over there."
Of the remaining new condos on the market, 16 are in RBC Plaza, 24 are in West, and eight are in 222 Glenwood.
Of course, once those are gone, it's not as if sellers will suddenly have the upper hand. The downtown Raleigh condo market always appealed to a limited number of buyers, and that segment is a lot smaller now than it was a few years ago.
And any owner looking to sell will quickly be reminded of recent events when the appraisal comes back.
No, what the selling of the remaining 53 units will do is possibly put a floorboard under prices. In this market, that counts as a corner turned.
