Why Downtown Condos Cost $250,000
For those who were asking why downtown housing seems so expensive, and whether affordable housing will ever be next …
Why downtown condos cost $250,000 By Steve Lackmeyer
| Tuesday, April 10, 2007 Edition: CITY, Section: BUSINESS, Page 4B |
For the past two years, the question has lingered among those watching the emergence of housing in downtown Oklahoma City: “Why are so many of the new units priced at $250,000 and up?
Such pricing left a lot of young urban professionals who rent downtown frustrated. They could afford to jump from a $750 a month rental payment to a $1,000 condominium payment. But $1,000 a month doesn’t get you past $200,000 without a hefty down payment.
It’s not as if downtown developers haven’t known all along about this pent-up demand. While they might make more money on a half-million-dollar condo, they would be assured a quick sale with units averaging $150,000. Yet in almost every major downtown development announced to date, the prices continue to hover at $350,000.
The Oklahoma City Urban Renewal Authority, recently given a choice between a mixed-use development of lower-price condos and apartments versus high-price residential towers for MidTown, went with the upscale product.
Credit Brett Hamm, president of Downtown Oklahoma City Inc., for offering an explanation that sheds light on the question of high-price housing.
The slant toward higher-price housing isn’t by coincidence — it is a grand conspiracy. Well, that’s not exactly how Hamm worded it. But here’s his take: you have to start somewhere.
You can start with expensive housing in an area and then eventually add lower-price choices to the mix. But you can’t start developing an area by building a lot of lower-price housing and then hope to add more expensive units later.
Downtown housing really was a blank slate as late as 2000. It was then that a study by Houston-based CDS Market Research reported 6,000 people desired to live in downtown Oklahoma City but their interests were thwarted by a lack of available housing.
That was the match that lit the fuse.Much of the development involves land controlled by the Urban Renewal Authority. The Hill, Block 42, The Centennial and now Overholser Greens all are Urban Renewal projects, all involving products generally priced north of $200,000.
Also priced higher than $200,000, but developed privately, are the Brownstones at Maywood Park. On the other side of this equation are the Central Avenue Villas, the Harvey Lofts and the just announced Lofts at Maywood Park as developments offering at least half of their units below $200,000.
But the number of higher-price units far out-number the ones that will be sought after by all those aspiring homeowners living in the Deep Deuce apartments.And that’s just fine with Hamm. One of the often-told rules of buying a home is to avoid the highest-price house on the block.
Take that wisdom downtown and you can see why it’s so important to get the high-end housing under way. You don’t want to buy a $400,000 house surrounded by $150,000 homes. But who doesn’t want to buy a $150,000 house surrounded by $400,000 homes?
Of course, the next question is whether all of this expensive housing downtown will sell. The results aren’t quite in yet, but with The Centennial a virtual sell-out and half the units sold at Block 42, the grand conspiracy is far from a failure.
One year has passed since I wrote this column. Since then, we’ve seen a sell-out at The Centennial and the Harvey Lofts, and only a few units remain at Block 42. Developers at The Hill have not disclosed their sales, and it’s too early to say whether The Brownstones at Maywood Park or the Central Avenue Villas will or won’t be a success. And one more thought. There are two city-oriented online forums in this town, www.okctalk.com and www.okmet.org. Both boards have members discussing this topic, but notice the difference in how they do so.
Here’s the okmet discussion.
And here’s the okctalk discussion.
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$250k for a condo, I wish. You shoudl see what the prices are like in Los Angeles.