The sales velocity experienced at Water’s Edge is also being buoyed by real consumer demand, even despite the expiration of the first-time home buyer tax credit on April 30 of last year. At the Riverview Club in Yonkers, N.Y., sales agents likewise just eclipsed the 50 percent sold threshold and are seeing steady improvements in both prospect traffic and offers, primarily from first-time home buyers and single-family downsizers. “Our prices range from the low $200,000s to mid-$300,000s, so the people who qualified for the first-time homeowner tax credit benefited from what was a good-sized chunk [of equity] to motivate sales,” says Randi Kahn of Yonkers, N.Y.–based River Hill Residential, which purchased the property in 2008 for an undisclosed price as a conversion from rental. “After the tax credit went away, sales deteriorated again. So I think what we are seeing now is real fundamental demand, not demand merely driven by government incentive.”
Units at Riverview benefit from amenities such as a pool, gym, concierge service, parking, and water views, but have also seen price discounts on average of 15 percent from their peak. “Units are well-priced now compared to two years ago; the market has obviously come down,” Kahn says. “Sales are never easy, and we battle for every contract, but at least we are moving in the right direction.”
Risk Big, Win Big
Far more attractive than the fractured deal is the failed condo development, particularly high-rise projects that boast luxury finishes, amenities, and high design. Such construction quality wasn’t (and, in some cases, still isn’t) feasible for rentals—the costs wouldn’t pencil out—but as a deeply discounted acquisition of a not-yet-built or partially built project, these deals can work.
