We’re brainstorming all sorts of new regular features here at YoChicago, one of which is a regular Q&A session with a buyer, developer, agent, or other person with insight into the market.
The first unlucky soul to face our “Five Easy Pieces” is George Schultz, a Realtor with @properties and the sales manager at R+D659 and Six North Michigan. Here he is, on the hot seat:
In a word or short sentence, describe the mood of the market.
I was going to say “optimistic,” but I think I’ll go with “cautiously optimistic.”
What’s the most common question you hear from buyers?
The buyer, especially in the new-construction market, is now asking pointed questions in relation to financing: “How many homes here have sold, how many have closed, and how many of those still under contract do you expect to close?”
What’s your best piece of advice for sellers?
It is crucial to constantly reevaluate where the market’s at and to diversify what they’re looking at. What I mean by that is that they need to evaluate not just their own neighborhood, but the market as a whole, and how their inventory fits in from the standpoint of what’s selling, what’s closing, and what those things are priced at.
Give me your best “There’s never been a better time to buy!” pitch.
For someone who desires to live in large-scale building, there is no better time to buy new construction if it’s priced aggressively, because chances are that new construction could never, ever be built for the price it’s going to sell for. Take a place in a commonly desired area that’s priced at $300 a square foot. There’s no way a developer can buy the land and build for $300 a square foot, let alone sell it.
What’s the worst marketing ploy you’ve come across lately?
Beyond the free plasma TV, which doesn’t equate to value any longer, I heard someone say something to the effect of, “We haven’t lowered prices like other places, so that’s good for our buyers and investors.” That’s another way of saying, “We’re overpriced in the marketplace.” That doesn’t demonstrate value for selling inventory. Until inventory is cleaned out, the values will not grow.
Mr. Schulz has missed the mark with his answer to your last question. I agree with the free plasma TV bit, and I’ll compliment Mr. Schulz as the R+D 659 project’s “Stimulate on This” advertisement was very effective. But to say that “We haven’t lowered prices,” is the worst marketing ploy he’s come across is a biased and unfair statement. Maybe he is trying to reaffirm the reason(s) that his project has slashed prices by $100k (which as sales manager is probably the right thing to do!). But, the buyers in buildings where prices have been slashed have, by and large, lost the equity in their homes for at least the short-term and he cannot agree this is a good thing. I recognize a half-empty building is not good for existing owners either, so maybe cutting prices is the lesser of two evils?
But what remains is that maintaining prices to protect the home-values of previous buyers and buyers under contract is a good and practical methodology, not necessarily just a marketing ploy. Whether or not it can be successful in a market where 10-20% mark-downs is becoming the norm has yet to be proven. However, to discredit this methodology as a bad marketing ploy seems narrow-minded. The benefits of maintaining the home values of past customers is dramatically more worthwhile and sensible than ensuring a customer has HDTV (regardless of how good the Bears are), so to include them both in the answer to this question is flawed.