Trendy is as trendy does. When granite kitchen counter tops were introduced at The Brannan back in 2000, almost every new development that followed made it a standard feature. How about stainless steel appliances? Does anybody remember what we had before those? And don't get me started on Studio Becker cabinets! I love them; don't get me wrong. They are a beautiful, high quality product that I have in my own home, but they are everywhere.
It's safe to say that once a San Francisco developer discovers an attribute or amenity that sells units, he sticks with it--perhaps to the point where it gets a little banal.
There is one trend that I'm happy to report has spread to just about every new development in the City. I'm referring to slashed prices. With Radiance, BLU and Arterra announcing dramatic price cuts last week, it's safe to say that all new construction sales offices have awakened and smelled the coffee. It's a particularly strong brew this morning and it shows that developers now understand what it takes to move inventory in this market.
There is a method to the madness; it's not only about moving units. Over at The Infinity, developer Tishman Speyer wants to make certain they have at least 25% of Tower II in escrow before they start closings in April. That first closing triggers the start of operations for the Tower's HOA and the assessments for all the unsold homes must be paid for by the owner (Tishman). It's understandable that they would want decent sales velocity before committing to paying the dues for 300+ units at an average of $700 per month. Once they hit their target, will prices go up? It's anybody's guess where the market will be in spring.
The team at BLU has a similar strategy. Announcing aggressive new prices last week (2-bedrooms from $599K), their goal is to fulfill a presale requirement that, if missed, will delay closings until the magic number is reached. Their pain may be your gain when they achieve their goal and decide that demand is sufficient enough to begin ratcheting prices up.
It's important to remember that for a city the size of San Francisco, there isn't that much condominium inventory. With a population of almost 800,000 people there are approximately 600 new construction condominiums available Downtown. We don't have a sea of empty high-rises like in Miami or Las Vegas and with developers slashing prices and new construction at a standstill, this could be a golden moment to enjoy a tall, cool glass of lemonade.
Remember: The sales office works for the developer; I work for you. My knowledge and expertise will get you the best home at the best price, period.
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