I've been watching Midtown Village for several years now because I was on the fringes of the back-end when things were just getting started and the project was just a great artist's rendering...
It's interesting to see what has happened to what promised to be a very exciting complex. I loved the idea of residential above office space and retail stores and I especially loved the idea of Hale Center Theater having a new location because their plays are always great...anyway
Everyone was excited about the pre-sales. Half the place was "sold" (as in) people wanted the condos and reserved their units early. The Realtors involved were doing their job. They had scale models built, there was a mall space, the tower was built first so they had a class A office space...everything looked like it was going as planned. The value of the units went up along with all of our property values. They were starting (I think) about $220,000 for 1200 sq. ft.
This was 2003...
I wouldn't blame the economy...the blasted project took too long! All those people that wanted the units wanted them in 2004. Businesses have been wanting to lease space for years and planned their businesses around it...EVERYONE WANTED IN, MR. DEVELOPER.
Buyers aren't simply "not getting the financing" I would bet that the APPRAISALS aren't coming in at the price they are asking currently. It's simple...banks won't give loans if appraisers find that the agreed selling price is too high for the market...even if the buyer THINKS it's a good value and wants to buy. It's set up that way to avoid the very thing were seeing now around the country with homeowners mortgaged more than their house is worth. Don't blame the buyers, banks or the economy. THEY ARE PRICED TOO HIGH and no bank will loan the money unless a buyer has a huge down payment or cash. I would bet my dog that the 4 that closed are probably cash buyers.
In real estate, the marketplace creates value...not a developer. And this developer shot himself in the foot by announcing in the Herald a few months ago that only 4 units were financed! When I read that article I really thought he'd gone crazy. I believe that he (with the Herald's help) created the sucking sound you hear in Orem.
I think he could still save the project by keeping his mouth closed, lowering prices to market (even $200 a square foot would be great prices. Regular homes are about $100 sq. ft. including a lot), and give his sales people something to work with. Sell, sell, sell.
I still think it's a great concept and although the north side does look weird with the yellow stucco base on, the south side looks great. The Pizzeria is obviously proving that State Street location is still good for business and with gas prices soaring, I think the idea of being able to hop on an elevator and go out to eat and to a play or drive just a few blocks to the store or the library is especially fantastic.
The developer should put his trust back with his Realtors and give them something to work with. Lower the prices (compensate the existing owners the difference for good will) get the stupid units in the south sold and the VALUE will NATURALLY increase as the project becomes more complete and whole.
Let your ego go and they will come...
IMHO
D.
EDITED:
I found this article just a few months old that says 85% were sold...let's get our terminology straight. Sold is when the money goes from bank to developer...not when a contract is signed. Anyway...I found this quote very interesting and very WRONG!
Link:
Orem's Midtown Village Nearly Ready for Residents
Deseret News Wednesday, Nov. 21, 2007
"Nearly 85 percent of the 334 residential units have been sold, with prices ranging from $250,00 to $1.6 million for a sixth-floor penthouse with 4,106 square feet. But isn't that a bit exorbitant? 'As long as people are buying it, it's not overpriced,' Rasmussen said."
