Saturday, March 24, 2007
Fallacies of Public Perception
I recently got a great comment from a nameless fellow blogger that seemed to be a perfect example (despite the massive run-on sentence) of some of the misinformation that I hear too often about downtown real estate.
Prices are dropping too! I know you're on the inside, but I'm one of those young up and comers so to speak that these lofts are suppose to target, yet no one I talk to would move downtown including me and I work downtown and look at these everyday.
I consider prices dropping to mean that something actually sold for more than it will later. Buyer's who visit lofts with me can attest to my beliefs that some lofts are overpriced. In 2005, there was a fork in the road, so to speak, where a group of developer's continued on doing what they had been doing for the past several years regarding new construction pricing. (See my post back then, Loft Pricing: 401) A newer group of loft developers sort of tested the market that year with limited success. What the heck, it was a boom year. Why not?
What happens in St. Louis real estate? The market rate seems to slowly increase.
To say that the prices are dropping to me means that the market rate has dropped. That happens with gas, bananas and beer, but not usually real estate. To see artificially high "list prices" drop does not mean that pricing has dropped. It just means that someone is trying to get real.
Point 2, Are lofts being built for the next generation? My answer would be officially, "sort of, but mostly not."
To me, some of the developers that are really trying the "youth marketing" thing are the same ones that are over-pricing, under-sizing, and not doing as well in the numbers game.
Despite all this, the urban renaissance in St. Louis marches on.