Molly Olmstead and her fellow sales associates are still shocked by unit absorption at The Ascent, a 49-unit condominium community in Avon, Colo., acquired via foreclosure by Louisville, Colo.–based real estate investor and turnaround specialist Condo Capital Solutions (CCS). The property had its grand re-opening at the end of 2010, and “we ended up having to have a lottery,” says Olmstead, the property’s official listing agent. “We had over 20 contracts with numerous contracts on specific units that required a lottery. We just looked at each other and said, ‘In this market? Really? OK, great!’?”
Olmstead credits the sales success at The Ascent to curb appeal value-add investments made by CCS and deep reductions from the prices sought by the property’s original developer. “The property benefited from cosmetic improvements and was brought back onto the market at a 55 percent price reduction, with units for sale from the mid-$300,000s to $1.1 million—hence the success.”
The national average for condominium sales saw improvement in 2010. “For the year, condos did eke out an increase, with a total of 599,000 sales in 2010, up from 590,000 in 2009, which works out to a gain of 1.5 percent,” says Walter Maloney, spokesperson for the Washington, D.C.–based National Association of Realtors (NAR), citing price reductions and low interest rates as the primary motivators of consumer purchasing.
In fact, condo prices in 2010 were slightly down (2.2 percent) to a national average of $171,000 per unit, according to NAR. Meanwhile, oversupply is expected to continue to challenge a broader recovery, despite the anecdotal bright spots. “To be in a market balance between buyers and sellers you want to see the supply numbers get down to the three- to seven-month range, and the condo sector is still at a 10-month supply,” Maloney says. “So the market is clearly favoring buyers, who, in many cases, are investors doing all-cash deals.”