A recent article (“Condos left behind in economic recovery,” Aug. 26) cited some of the overall challenges with Fannie Mae and Freddie Mac financing because of issues in markets such as Miami and across the country, the piece left out some of the bright spots that exist in Kansas City’s condo market.
Let’s look at the numbers. This year’s single family home sale units for the city were at 18,067 in July. This is up 11 percent from 16,347 at the same time last year. The article referred to this trend as “warming,” so by comparison, the condo market must be “hot.” July’s sales to date in 2013 hit 407, marking a 27 percent increase over the 319 sold during the same period last year.
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Some in the local real estate community have noted that a closer look at some of the other numbers cited in the article yield a much different perspective than that suggested by the article’s headline. For example, while the article noted that One Park Place sold 59 of its 108 condos “over seven years,” it is important to note that 30 of those sales happened in the past two and a half years. The average number of One Park Place sales annually during its first four years was only six, but during the last three years it has been nearly 12 annually (35 total), which demonstrates significant momentum.
The article noted that several condo projects were once envisioned and never built. That is a business decision that happens in every industry and in every real estate category. The time it takes for a project to sell out is also based on business decisions, such as how well it’s priced, marketed and supported by the developer. Yes, conventional financing has been a challenge, but that doesn’t mean that banks aren’t lending. Area banks are making loans at Fannie Mae-approved condo properties including, for example, One Park Place, Kirkwood and the Sulgrave Regency.
Condo sales in MLS area 202 (the code for roughly the River Market through the Plaza) are up 26 percent in the past year, which mirrors the 26 percent increase in the overall KC metro. Are those numbers as high as in the pre-recession boom? No, but that experience is not condo-specific. The housing economy in this market and across the country was hit hard in the economic downturn.
However, the rebound in this market has exceeded that of the rest of the country. According to Freddie Mac’s August 2013 U.S. Economic & Housing Market Outlook, the nation has seen approximately a 13 percent growth in housing sales. For our area, that number is 14 percent.
Simply put, one cannot look at one or two unhealthy projects and make assumptions across the market. The strength of the developer, timing, the product and the marketing approach make all the difference. Kansas City’s condo market has thousands of condo buyers in at least a dozen successful projects. In addition to those already mentioned, 4646 Broadway, the Sulgrave, Wall Street Towers, the Ravello, the View, Riverbend, 46 Jefferson, Conover, Churchill, Bridgeworks and the Crestwood are all shining examples of Kansas City’s condominium success story.
While the heyday may not yet have returned to us, we would posit that rather than being “left behind,” the condo market in Kansas City is actually in front of the pack.