Tuesday, April 5, 2011

The Continuing Saga Of The VUE

No newsletter would be complete without some information about The VUE.  I look at The VUE everyday from my condo, and see pockets of lights in the building.  The official tally is that as of this date, April 1, 2011, 16 units have closed.

The developer has been willing to be creative with some buyers to allow them to buy down to other units less expensive, and to move their deposits with them.  This may not be an ideal solution for buyers, but it can be helpful.

MCL, the developer claims to have approximately 200 contracts.  Today, it was announced that a buyer cannot be forced to purchase a unit they have contracted for, or pay damages as claimed by the developer.  They will still lose their initial deposit though.

This ruling should clear the way for closings to begin to take place.  Some buyers were waiting to see what the ruling would be in hopes that they would be able to secure their initial deposit back, but that appears not to be the case.  The big part of the ruling is that the developer is not entitled to any monetary consideration outside of the deposit itself.

The building itself is really quite marvelous.  The amenities are well thought out, and the location is great.  The views from the building are pretty incomparable.  What the building desperately needs is occupants. 

If you wish to take a tour of the building, please contact me to arrange one, I never get tired of going in to The VUE.

In the mean time, what does that mean for current property owners?  Currently in MLS, The VUE has 3 properties listed, and they average around $526 per square foot.  In 2010, the average price per square foot in the Fourth Ward for a closed transaction was $230.  That 2010 price included financially distressed properties, which deflated the value of the sale.  So, lets make some assumptions.

1.) The economy is getting stronger, people are feeling better about their jobs, current companies have resumed hiring, and other businesses are relocating here.

2.)  With the first lawsuit settled (though it will be appealed) other buyers will need to make hard decisions as to whether they can walk from a significant deposit.  For this purpose, lets assume that the majority of the buyers do not walk away.

3.)  As more units close (based on assumption #2) there will be renewed interest in new sales in the building.
I cannot make any assumptions as to the developer restructuring the pricing for the building.

My belief is that a renewed interest in the downtown condo market will lead to an increase in the sale of units in other buildings that offer perhaps larger space as well as other amenities.  Couple this with the number of financially distressed properties diminishing will lead to the recovery of the market. 

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