Developers who are determined to move unsold inventory are finding that price reductions in the vicinity of 20% tend to garner strong interest. Lesser discounts have not been nearly as effective. Thus, in the buildings where we are seeing some strong absorption recently, we frequently are seeing discounts in the range of 20%. However, as indicated by the limited sales velocity in the market overall during 1Q 2009, few developers have adopted a willingness to accept heavily discounted offers.
– One of the “General Trends/Changes and Patters in the Market” mentioned in the summary of Appraisal Research Counselors‘ latest Downtown Benchmark Report. Although discounting is helping stalled projects get back on track, the report warns that “it could have a ripple effect and begin impacting other properties” this year.