Hill, The

[betts]

Good post and it does lead one to believe their costs are high. But the market in OKC makes it quite difficult to sell homes at 200+/sq ft no matter how nice they are.

Depends on the neighborhood. I know someone who's asking price for their house here is 500+/square foot. Look at housing prices in Nichols Hills, Gallardia and some of the nicer neighborhoods in OKC and you'll find $200/ft is low end.

[semisimple]

Depends on the neighborhood. I know someone who's asking price for their house here is 500+/square foot. Look at housing prices in Nichols Hills, Gallardia and some of the nicer neighborhoods in OKC and you'll find $200/ft is low end.

$500/sq ft sounds downright crazy for Oklahoma, and I find the idea of average prices over $200/sq ft in even the nicest neighborhoods hard to believe. Trulia lists $146/sq ft on average in Nichols Hills, $96/sq ft in Edmond, and $73/sq ft for all of OKC.

http://www.trulia.com/real_estate/Ni...ills-Oklahoma/
http://www.trulia.com/real_estate/Ok...City-Oklahoma/

Obviously, the prices are going to vary substantially depending on the neighborhood--but, looking around on this map, I can't find any OKC neighborhoods listed where homes are going for over $140/sq ft on average.

Especially in light of these numbers I think those prices in downtown OKC are simply too high.

[betts]

These, post recession, are all about $300/sq foot in Nichols Hills, which I know is less than they were selling for pre-recession on the average. If the average in Nichols Hills is $146/sq foot, that's probably because the majority of houses that have sold in the last year are the small not completely updated ones on the perimeter. And there is one, not in the multilist, that has an asking price of over $500 a square foot, and I happen to know that this family paid over $400 a square foot for it a few years ago.

http://www.zillow.com/homes/nichols-..._zm/1_rs/1_fr/

Here's one in Crown Heights that recently sold for about $221/sq foot

http://www.zillow.com/homedetails/71...21849457_zpid/

Also, you have to remember that asking price is not selling price and frequently negotiations result in a slightly lower price per square foot after sale. If people are buying, and that article said that they've sold just over half of the Maywood Lofts and 5 of the townhouses on the Hill this year, then someone thinks that price per square foot isn't outrageous. I don't, personally, and I've bought ten different houses since moving to Oklahoma City. But again, if they don't sell, at some point in time the builders will have to adjust the price to make them sell. The market ultimately determines what an appropriate price is.

[flintysooner]

If you are the developer and have inventory that has not sold then you are either paying interest to carry that inventory or you are losing investment income or both. In the latter case of lost investment income that figure is about as near to zero as one can get. In the former case of interest paid we are in one of the lowest rate periods of history. The lender or lenders certainly do not want any properties back.

Another issue in an area that is still developing is that reducing prices now would have the effect of reducing prices for future projects -- a cheapening of the brand so to speak.

Besides that this is a rather small geographic area and there will be a limited number of units available. Unless one is entirely pessimistic about Oklahoma City urban development it makes sense to believe the future holds more economic opportunity than the present. And it is hard to be entirely pessimistic given the state of Oklahoma City development downtown in the midst of the worst economic climate since the Great Depression.

Then there is the fact that this is new construction and better than average quality which adds to the cost of the product.

And the price itself is not that far out of line with other new construction around the area for the same target audience.

Unless we are willing to only build developments that are heavily subsidized by government (and I don't mean TIFs) then the market will decide but the market is far more elegant than we generally recognize.

[yessir69]

I do agree with the overpriced argument. When they developed Harbortown and South Bluffs in downtown Memphis, they were MUCH cheaper and the construction was superior to what they are building on The Hill. I don't know what happened down there...

[flintysooner]

The several Harbor Town listings I viewed were all above $150 per sf and claimed big discounts from built price.

[blangtang]

$100-125 a sq foot seems fair to me, but i'm not a pioneer...

[flintysooner]

Suburban lot prices now are above $50,000 and can easily exceed $100,000.

[Rover]

This is the problem...people here don't want to pay for a lifestyle. In other cities, it is normal to pay more to live downtown. Here, people expect to pay suburban prices for an urban lifestyle. And we wonder why we can't get developers interested in high density downtown development. We are spoiled as to real estate prices here, but it is a two edged sword. Unless it is the cheapest rent/purchase in the country, people won't buy in here.

[onthestrip]

This is the problem...people here don't want to pay for a lifestyle. In other cities, it is normal to pay more to live downtown. Here, people expect to pay suburban prices for an urban lifestyle. And we wonder why we can't get developers interested in high density downtown development. We are spoiled as to real estate prices here, but it is a two edged sword. Unless it is the cheapest rent/purchase in the country, people won't buy in here.

This is the gripe. OKC's downtown doesnt offer the urban lifestyle that most cities do. You arent getting a real urban, live/work/play lifestyle in OKC and therefore nobody will pay a huge premium to live downtown. Until people can walk to a bar, bookstore, drugstore, or grocery store or catch a streetcar to a play at the civic center, you will get people complaining about the prices.

[flintysooner]

This is the gripe. OKC's downtown doesnt offer the urban lifestyle that most cities do. You arent getting a real urban, live/work/play lifestyle in OKC and therefore nobody will pay a huge premium to live downtown. Until people can walk to a bar, bookstore, drugstore, or grocery store or catch a streetcar to a play at the civic center, you will get people complaining about the prices.

Not really disagreeing with you but any new development area is like that. Developments do not start out mature. So a new subdivision may not have the club house and pool and parks and common area landscaping at the beginning. So those initial buyers are having to imagine what the area will be like when all the lots are sold and the amenities added. Not everyone can do that or will do that or wishes to exercise the patience necessary to see it through.

Every development has some demographic in mind when it is conceived. That simple thing alone reduces the size of the potential market.

Additionally in order to really achieve substantive savings for new construction there has to be economy of scale and what constitutes scale continues to increase. In other words the builder buys 100 toilets of the same kind or 100 units worth of carpet or whatever the magic number is to find volume discounts. Smaller developments that require longer time horizons just do not very well lend themselves to that kind of efficiency.

[Rover]

I completed a condo project in downtown Bellevue, WA and visited it two weeks ago. The economy is slow there so they units have been severely discounted and one tower is turned into a "for rent" tower. In them, a 650 foot for rent goes for approximately $2,100/mo and since going for rent about 60 days ago is about 40% occupied. The condo tower is going for a discounted amount of approximately$750/ft.

Now I understand this isn't Washington here, but this is also downtown Bellevue, not Seattle. And while it is more developed than OKC, it hasn't been that way all that long and there are probably 15 condo towers downtown that were built because people would pay. Stores followed, not preceded.

All over the country, new urban construction will go for $300 up to $1,000. When I hear that people want to pay $110 and then complain when no developer wants to consider building a mid-high rise, I wonder why they would expect them to. At some point the people in this city need to put some $ where their opinions are and encourage developers to do their job. I see it happening in Austin, Kansas City and other cities in the region, but I don't see it in OKC. Unless it is cheap, cheap, cheap, the "urbanists" don't want to participate. Of course, I would love a fully developed urban experience in a quality building environment with completed infrastructure for $100 ft. But it won't happen.

And, no city in their right mind wants to fill the urban core with cheaply constructed buildings or build-outs that will create slums in 20 years. They want the upwardly mobile, young professionals, and the executive class to be in the center to promote a good economic model. They don't want people who won't spend money to take up cheap space. The "creative" class and those who can't afford it tend to live in places like Soho and Chelsea in Manhattan, not on Park Avenue.

That said, the developers we have need to learn to build projects appealing to the right people. To ask 60 year olds to live in a 3 or 4 story townhouse and climb two floors of stairs to go to bed is also asinine. They need to decide who they really are appealing to and design accordingly. To build a project with a floor plan appealing to 20-30 somethings and the wallets of 50-60 somethings is just bad business and a lack of understanding of your target market.

[betts]

And, no city in their right mind wants to fill the urban core with cheaply constructed buildings or build-outs that will create slums in 20 years. They want the upwardly mobile, young professionals, and the executive class to be in the center to promote a good economic model. They don't want people who won't spend money to take up cheap space. The "creative" class and those who can't afford it tend to live in places like Soho and Chelsea in Manhattan, not on Park Avenue.

This is an important point, IMO. Cities like Chicago and New York have buildings that were intially built for upper and middle class people with high quality materials. Many of them then became slums or lower income housing but the quality was still there. They were then rediscovered by young people because of the inexpensive prices who made the neighborhoods chic. Then, the middle and upper class people returned to take part. The buildings have to be well built to withstand that peak and valley and if we start cheap, we'll never get back to the neighborhoods being desirable to the more well-heeled. We'll just end up with construction that has to be torn down to make way for more cheap construction. There are plenty of places like the Plaza District and SoSA that have older houses that can be refurbished to give a downtown or near downtown experience for those who want to spend less. Because we never had the masses of row houses and apartment buildings that older cities have, living in an urban environment in OKC by definition has to be different.

That said, the developers we have need to learn to build projects appealing to the right people. To ask 60 year olds to live in a 3 or 4 story townhouse and climb two floors of stairs to go to bed is also asinine. They need to decide who they really are appealing to and design accordingly. To build a project with a floor plan appealing to 20-30 somethings and the wallets of 50-60 somethings is just bad business and a lack of understanding of your target market.

I know that you can have an elevator in Maywood Park because I have one. You can get one in either the three or four story townhouse. To get it in the 2 and a half story townhouse you would have to reconfigure, but it's still possible because most of them are only framed, not finished out. I remember looking at the blueprints for the Hill when I was trying to decide which one appealed to me more and I noticed that the four story townhouses can have elevators. I'm not sure if the three story ones have that option or not. I'm not sure whether that point has been emphasized to people looking to buy or not.

[adaniel]

All over the country, new urban construction will go for $300 up to $1,000. When I hear that people want to pay $110 and then complain when no developer wants to consider building a mid-high rise, I wonder why they would expect them to. At some point the people in this city need to put some $ where their opinions are and encourage developers to do their job. I see it happening in Austin, Kansas City and other cities in the region, but I don't see it in OKC. Unless it is cheap, cheap, cheap, the "urbanists" don't want to participate. Of course, I would love a fully developed urban experience in a quality building environment with completed infrastructure for $100 ft. But it won't happen.

And, no city in their right mind wants to fill the urban core with cheaply constructed buildings or build-outs that will create slums in 20 years. They want the upwardly mobile, young professionals, and the executive class to be in the center to promote a good economic model. They don't want people who won't spend money to take up cheap space. The "creative" class and those who can't afford it tend to live in places like Soho and Chelsea in Manhattan, not on Park Avenue.

Forget Seattle. If you wanted to live in the Inner Loop portion of Houston, one of America's cheapest cities, you will need at least $300K to get your foot in the door for a condo that doesn't need a lot of work and at least $400K for a townhouse. Granted the Inner Loop area is way more advanced than anything in downtown OKC, but then again you can go get a nice new 2500+ sq ft home in their suburbs for 175K or less. You will also a have a hellish commute if you work in the central city.

Pricing something in this market in this time is probably very challenging. Central OKC a lot of inward pulls on people, like easy access to amenties, but there's no "push" (ex: traffic delays, land constraints to suburban development) to force people to want to live in the inner city. $4 gas was about the closest we had to that, and even still a shocking number of people just put up with it. I think that we would be having this discussion here even if there were those push factors. I hate to say this, but the local culture here is a bit "cheap", i.e. it puts a high value on present "bang for your buck" independent of any long term savings. And its been like that way before the recession hit. When I tell friends what I pay for my new place in midtown, they balk at it without realizing that my gas savings alone make it a financial saver for me.

[Rover]

I know that you can have an elevator in Maywood Park because I have one. You can get one in either the three or four story townhouse. To get it in the 2 and a half story townhouse you would have to reconfigure, but it's still possible because most of them are only framed, not finished out. I remember looking at the blueprints for the Hill when I was trying to decide which one appealed to me more and I noticed that the four story townhouses can have elevators. I'm not sure if the three story ones have that option or not. I'm not sure whether that point has been emphasized to people looking to buy or not.

I agree that the elevators are nice features and make it more possible, but the projects so far really aren't what I would call "urban" development. I have been involved in a couple of condo developments in Austin and they are mid-rise urban core buildings with flats and not multi-levels. If the Founder's Tower Condo building was in downtown I bet it would be a hit. It has a concierge service, doorman, secure parking, workout area, etc. It appeals to people who can actually afford a lifestyle. I lived in Center Plaza in downtown Tulsa...same kind of services with security, free van service, access to grocery shopping, etc., and it has stayed full since being built. That is what appeals to those who will pay $200+/ft and will live downtown.

Should there be buildingsw that houses those who want to spend less or have less to spend.....absolutely. That is what Deep Deuce should be about. Build cheaper buildings of to-rent apartments and then bulldoze them in 20 years when downtown grows out and makes the land more valuable. But don't expect row houses on the edge of downtown or cheap lofts in the core to be the entire engine of residential growth.

[semisimple]

This is the gripe. OKC's downtown doesnt offer the urban lifestyle that most cities do. You arent getting a real urban, live/work/play lifestyle in OKC and therefore nobody will pay a huge premium to live downtown. Until people can walk to a bar, bookstore, drugstore, or grocery store or catch a streetcar to a play at the civic center, you will get people complaining about the prices.

Exactly my point. I could see the justification for paying such a premium if downtown had all the amenities that one might expect of an urban lifestyle. Another factor is the commute: the adage "you can get anywhere in OKC in 20 minutes" is mostly true and so if you work downtown, living in Edmond or far NW OKC is a viable option. Since OKC has done such a good job of accommodating suburban sprawl, there's less "inherent demand" for urban living as exists here Austin for example.

And just for comparison's sake, I used to rent out a newly-renovated small condo that recently sold for $250/sq ft near downtown Austin, where I could walk to several local shops/restaurants and was a short bike ride to the downtown Whole Foods and chain retail like REI, BookPeople, etc (with a bike path or bike lanes the whole way). Hence you can see my puzzlement when similarly-outfitted condos near downtown OKC are supposedly going for comparable prices. Not saying it won't get to that point but it isn't there yet.

And, no city in their right mind wants to fill the urban core with cheaply constructed buildings or build-outs that will create slums in 20 years. They want the upwardly mobile, young professionals, and the executive class to be in the center to promote a good economic model. They don't want people who won't spend money to take up cheap space. The "creative" class and those who can't afford it tend to live in places like Soho and Chelsea in Manhattan, not on Park Avenue.

I do understand and agree with the argument for having quality housing downtown that caters to a more upscale population. However, I do not like the idea of downtown being exclusively for the upwardly-mobile crowd. I'd rather see the "creative class" move into places like Deep Deuce to start, then once an actual community is developed (i.e., local shops and basic amenities), follow with higher-end, high-rise developments in the CBD. Moreover, it's not unreasonable to think that a place that started selling at $150/sq ft could go for double that price ten years down the road when demand is high. Just because a place isn't outfitted like a Fifth Avenue penthouse when it's built doesn't mean it will be a slum in twenty years.

[Rover]

http://realestate.msn.com/slideshow....F%3A%20Atlanta

Go see what $200,000 buys in other cities...even today.

[betts]

And just for comparison's sake, I used to rent out a newly-renovated small condo that recently sold for $250/sq ft near downtown Austin, where I could walk to several local shops/restaurants and was a short bike ride to the downtown Whole Foods and chain retail like REI, BookPeople, etc (with a bike path or bike lanes the whole way). Hence you can see my puzzlement when similarly-outfitted condos near downtown OKC are supposedly going for comparable prices. Not saying it won't get to that point but it isn't there yet.

It depends on what is important to you. From where I live, I can walk to any of the restaurants in Bricktown, Deep Deuce or the CBD, as well as 9th street restaurants and any store on Broadway. I can easily bike to Midtown, without having to worry about significant traffic in the evening. I have my choice of Starbucks, Coffee Slingers or Cocoa Flow, all reachable in a few minutes if I want to sit and drink coffee. Before renovation, I used to walk to the Myriad Gardens (and sneak my dog in) and I can easily ride my bike to the river if I want some exercise. I live a block from the downtown YMCA, and can walk to the movies or the Ford Center in about 5 minutes. Within 5 minutes of me is my bank and my dry cleaners. It's true, I have to drive to the grocery store, but from where I used to live, the Albertsons was no closer than it is now. Although a closer grocery store would be nice, I don't cook enough that it's really that high on my list of priorities. I don't walk to work, but I could if I wanted, or I could easily walk to the Health Sciences Center shuttle (2 blocks). I don't use it because I come home for lunch to walk my dog most days and so I need to get from work to home and back again fairly quickly. I would love to be able to do more shopping downtown, but I had to drive to retail before I moved as well. I'm happy I have so many places to walk to, and I don't dwell on the few things I'm missing.

In addition, because my townhouse has concrete construction, my utilities are one tenth what they were when I lived in my suburban house. I've calculated that I save at least $30,000 a year on utilities, taxes, yard work expenses and gas. That starts dropping the price per square foot rather rapidly.

[Rover]

And my point is that the prices seen today are low because downtown is not fully developed and so that discount is already factored in. In 10 years when the city is more mature, these prices will seem down right cheap.

The other thing is that with today's cost new construction is still expensive. A developer can't do development of project site work, infrastructure and construction for the same as they can in the suburbs pouring a slab (that will crack in 10 years) and nailing sticks together to make a house of questionable quality. When you have neighbors across the wall, a foot above your ceiling and underneath your feet, you can't make the same quality of structure and get by with it..

[lcd1712]

And my point is that the prices seen today are low because downtown is not fully developed and so that discount is already factored in. In 10 years when the city is more mature, these prices will seem down right cheap.

The other thing is that with today's cost new construction is still expensive. A developer can't do development of project site work, infrastructure and construction for the same as they can in the suburbs pouring a slab (that will crack in 10 years) and nailing sticks together to make a house of questionable quality. When you have neighbors across the wall, a foot above your ceiling and underneath your feet, you can't make the same quality of structure and get by with it..

Aside from having luxury fixtures, appliances, etc, I don't think the construction itself is of that much quality.I hope they are better than Legacy Woods apartments, but they are definitely not the same construction quality seen in for ex. Manhattan.

I believe that @ 220s/sq ft. they are overpriced, specially when the area is still deserted. Bricktown is still not the entertainment hub one would wish, especially with competition from Western Ave, and the ever growing Memorial Rd.

They should have started their projects in phases, where you would offer a good starting price (around $150 for my preference) and then, once sold, start building the next phase at higher prices, bringing the total value up.

As they are right now, those condos gives you a perception of urban living, but like many other people have suggested, the area is not "Urban" yet. So you are basically buying a perception, a very pricey perception. At least that's how i see it. If they had similar condominium constructions in the busiest and better looking parts of Edmond, like certain parts of Broadway Ave, on 2nd St (from Broadway to Bryant) and/or 15th and Bryant, I would buy them without thinking I am missing out. Those sections of Edmond have more life than Deep Deuce's current developments.

[betts]

While there might be more "life" in Edmond and on Memorial Rd, a concept I disagree with considering the variety of entertainment options downtown, ranging from restaurants and movies, to sporting events, music and theatre venues as well as art galleries and a museum, I have yet to see people walking to or between venues on Memorial or in Edmond. Even Western is difficult to walk. It's very much a car driven society up there, and personally, I chose downtown as much for its walkability as entertainment and dining options. To me, walking is as important a part of an urban lifestyle as anything.

As far as prices go, people who think $220/sq foot is too much to spend aren't being forced to buy. People buying may disagree, and again, the market is certainly influenced by demand. If lower priced options are offered, it will be interesting to see how many of those criticizing current prices put their money where their mouth is.

[flintysooner]

And my point is that the prices seen today are low because downtown is not fully developed and so that discount is already factored in. In 10 years when the city is more mature, these prices will seem down right cheap.

I think this is very true. The problem for a lot of people is how long that time line might be.

[flintysooner]

They should have started their projects in phases, where you would offer a good starting price (around $150 for my preference) and then, once sold, start building the next phase at higher prices, bringing the total value up.

The problem with that is the way lending works. And at least some lending will be necessary although some transactions may undoubtedly be for cash. The lending is based on appraised values and the appraisals will be based on similar, recent sales.

[okclee]

Betts.... You do a great job selling urban living in downtown Okc. I'm surprised you are the only one that posts on this topic. Do we not have more people on OkcTalk that live in downtown?



I feel like Betts is always having to defend where she chooses to live.

[lcd1712]

While there might be more "life" in Edmond and on Memorial Rd, a concept I disagree with considering the variety of entertainment options downtown, ranging from restaurants and movies, to sporting events, music and theatre venues as well as art galleries and a museum, I have yet to see people walking to or between venues on Memorial or in Edmond. Even Western is difficult to walk. It's very much a car driven society up there, and personally, I chose downtown as much for its walkability as entertainment and dining options. To me, walking is as important a part of an urban lifestyle as anything.

I don't disagree with you. This will be the ideal. I just think the entertainment area is not developed to its full potential. The whole urban lifestyle which I like (and don't disagree with you with the concept of urban) is not there yet. My opinion is that there is a potential of urban lifestyle, but what is being sold right now, it just potential. Can you honestly say that living in those properties today gives you a full experience of urban lifestyle?

As far as prices go, people who think $220/sq foot is too much to spend aren't being forced to buy. People buying may disagree, and again, the market is certainly influenced by demand. If lower priced options are offered, it will be interesting to see how many of those criticizing current prices put their money where their mouth is.

Nobody is talking about forcing anyone. In fact, I believe price is more of a factor on why those units aren't sold than the housing market itself. I think some of the units that were sold intially had to do more with the hype and belief that prices will eventually soar, making it a good investment. I do not buy one, because I think it'll be a bad investment on my part. If prices were around $150 - $175 sq. ft, I'll be looking into purchasing a unit.