It is time to lower prices for all high rise condominium sales between Seattle and Bellevue. The projects that have done it are enjoying much success. I don’t need to point out specific names, because as consumers we are well aware of who it is and how it has affected their sales. I like being transparent and will continue too, but at the same time both builders and the consumers deserve a fair shake. It would be easy to throw a few projects under the bus, but that does not help the issue. For now, I’ll treat this as a public service announcement and hope that the Seattle area developers listen to my “opinion” on the market.
For any of the developers who may happen to read this, I don’t mean to make this sound too simple. I know how much work and effort you have put into your project. Unfortunately, the consumer will tell you it is not their fault that when you started your project you were building at a much different time. Thus, pricing your units at higher price then what is should be today. The expectation has changed. From what I can tell this has been the approach of many of your projects thus far:
- In some cases you have fired the sales team and went “in-house” (in a few cases multiple times)
- You lower prices moderately for months at time making little to no impact on the consumer confidence in your product
- You contact your contracted owners, but not real solutions on lowering prices or renegotiating their terms.
- You have avoided public announcements of potential or scheduled price reductions because……….?
Its time to change your approach. Buyers now are more savvy then they have ever been. In some cases, they know as much or more about pricing then your sales team does. This also includes your competition. I don’t mean to say that viciously either. It is just a common practice now for many of us to read, review and even pick out a unit before we visit your site. In most cases there are enough educated options on pricing to help the consumer put a value on the project as well. Don’t run from this change; embrace it.
As I mentioned before, I refuse to throw any project directly under the bus. With that being said, I feel I can share a story about an anonymous project that I have been incredibly disappointed with. Back in December, I contacted this project to get an update on sales. I had heard that a few Seattle projects were starting to see an uptick in numbers of units under contract and I simply wanted to touch base with the sales team and get an update. To make a long story short, I was ignored by the sales staff. Not once, or twice but I made 4-5 points of contact and I was given nothing but a cold shoulder. I made it clear that my intentions were to update “YOU” (the readers and consumers) and that UCS or myself did not stand to benefit. At any rate, I was brutally ignored and left disappointed. Due to the enormous size of this project and the importance of having a qualified and dedicated sales staff, I felt compelled to call the developer myself; which I did. I shared with him my constructive criticism. He thanked me, told me he would get back to me. Well, guess what……..no phone call, e-mail or point of contact. Unbelievable.
Somewhere in the last two years, local developers have lost their touch. To be fair, there are very few good ones and I think I have complemented their projects many times over the last few months. I will most likely give them more accolades and praise as time goes on. However this post was not about them. It was meant to be “another” wake up call to all developers that are still hanging on to what they think will sell units. Here is what I would like to make clear:
- Evaluate your sales team. (make sure they REALLY represent whats best for the project)
- Adapt to Social Media. If you haven’t figured that out yet, fire your marketing group
- Be loyal to your contracted owners. They are all you have at this point
- Be aware that blogging will exist whether you like it or not. If you are more transparent, you might look better to the public
- Talk to your lender and have them meet with me or someone else in this market that can really tell you what buyers expect to pay.
- Let lenders give you feedback on pricing. We all know they are breathing down your neck. Open your book of business and offer to make changes.
- Reap the rewards.
I don’t boast to know it all, but I do know a little about the consumer, marketing and pricing. If you do what I’ve highlighted and you make big internal changes, I think you’ll be happier at the end of 2010 then you were in before you read this. To your success.