Slow market has some firms pondering rental units, redesigning future building
May 23rd, 2007 - Category: Condo, Real EstateLocal condo developers are being careful before beginning new phases and, in some cases, redesigning projects in response to a soft market.
Construction on the first building of 115 presold condos at Bradenton’s Promenade at Riverwalk, at Third Avenue and Eighth Street West, is just wrapping up, but the second and third phases are “under design” and “may not be condominiums,” according to Jan E. Smith, president of Jan Smith and Co.
He declined to say exactly how the project might be redesigned.
“The condo market has sort of been a trickle the last several months. It feels like we’re about at the bottom,” Smith said. “We had a very overheated market in ‘05 and ‘06, and when things slowed down, they really slowed down. You have to have equilibrium. Once we get back to that, it’ll be a normal market.”
Evidence of continuing trouble in the condo market came with news this week that preconstruction sales at SevenShores condominiums on Perico Island have been called off a year after the units went on the market. Deposits had been received on only nine of the 686 units.
Some condo developers sitting on a lot of unsold units may switch from condos to rental units, said Tim Polk, Bradenton’s director of planning and community development.
“I think some of these condos could revert to rental units if they don’t hurry and get rid of the inventory,” said Polk. “There’s still a large amount of (unsold) inventory out there that’s not been absorbed. Some might get antsy and start looking at reversions to rental units.”
At Palma Sola Bay Club, construction is slated to start in a few weeks on the project’s first building, which will be followed immediately by construction of its clubhouse, said Evelyn Treworgy, president of the club at 3400 75th St. W.
Plans call for eight phases and 201 total condos.
Over the summer, she’ll be gauging the market, she said.
“Recently, it appears to be looking up, traffic has been moving better, the Web site is moving well for us - maybe we’re seeing a little turn here,” Treworgy said.
The developer of Bel Mare at Riviera Dunes has sold five condos in the last three weeks, but said that, because of a buyer’s market, most people prefer to wait until the building is nearly finished before signing a check.
“They wanted to be able to look at amenities, look at the view,” said Tim Morris, chief executive officer at Bradenton-based Corvus International, which finished its first building with 62 condo units in April.
The company expects to finish a second building and begin construction on a third in July, for a total of 186 units priced from $600,000 to $2 million, said Morris. The project is located at 120 Riviera Dunes Way, Palmetto.
The sales advantage goes to those whose buildings are up or nearing completion, he said, since about 90 percent of buyers are unwilling to put money down on a unit that does not yet exist, he said.
“Tower projects take 3½ to four years,” he said. “If you’re 55 and moving from Columbus, do you want to wait four years or put your furniture in and move in next week?”
Information from: www.bradenton.com
