Post-Auction Market Conditions Influence Seller to Offer Units Up to 25 Percent Off List Prices Using Bulk Sales

SEATTLE, Oct. 8 /PRNewswire/ -- Executives at Realogics, Inc. announced today their brokerage will represent the marketing and sales of Eleven Eleven East Pike, a 27-unit condominium development located at 1111 East Pike Street on downtown Seattle's Capitol Hill. Designed by the nationally acclaimed architectural firm of Olson Sundberg Kundig Allen, the unique loft concept is now complete and makes its official sales debut. Acknowledging that recent condo auctions have put downward pressure on unit appraisals, the seller has adopted Realogics' unique bulk sales strategy to establish market values and spur sales at the development.

"I'm still proud that we assembled an extraordinary team and brought an innovative new kind of urban living to Seattle; but now, as difficult as it is, we're putting all that aside and calibrating to the prevailing market with its current glut of discounted production units," said William Justen, development manager with The Justen Company. "Eleven Eleven East Pike now offers a value proposition that's as compelling as its architecture."

Justen has approved a limited release of nine homes with special incentives for units that close before November 30, 2009:

• Bulk pricing from 15 percent up to 25 percent off original list prices
• Zero closing costs
• Available interest rates below 5 percent
• First time homebuyer tax credits up to $8,000
  

The bulk sales approach offers a cumulative sales volume discount depending on the percentage of homes that are sold within the current sales release. Prospective buyers may join in the bulk sale with a refundable deposit of $500 through October 2009. The more homes that sell, the greater the discount for all buyers that participate. All buyers in the first bulk sales release must close by November 30, 2009 to realize the full benefit offered in the incentive package. Buyers may also "buy it now" at preset pricing.

"Our seller will share their marketing savings with buyers provided they make some quick deals," said Sam Cunningham, Managing Broker for Realogics Brokerage, LLC. "It's a creative strategy to kick-start sales in a post-auction marketplace and it provides a win-win for the buyer and seller alike."

Cunningham said the bulk sales approach is resonating with buyers at other participating communities as well. Beyond price, he believes the "celebrity" design and a preferred location of Eleven Eleven East Pike will also help nudge homebuyers off the fence.

Designed by Tom Kundig, Eleven Eleven East Pike boasts expressive architecture, open plan living spaces and unique features such as an exclusive-to-project "puzzle wall" system - a full-height movable wall partition that closes off the kitchen and bedroom from the great room for entertaining or privacy.

"Innovation with new construction is merely a product of challenging the status-quo," said Kundig. "As an architect, I have an opportunity to create something that doesn't already exist, and ideally, it won't ever be duplicated again."

Kundig's effort to differentiate Eleven Eleven East Pike from production-oriented developments becomes evident upon a building tour and according to Justen; it should appreciate given the "collectable" nature of the product. On paper, however, a mortgage underwriter bases a unit's value solely on appraisals today, which won't always recognize intangible investment values like consumers do. Furthermore, developers and brokers may no longer appeal to appraisers for value consideration. Rather, they must accept prices dictated largely by the surrounding marketplace.

"It doesn't seem to matter what a buyer is willing to pay anymore - it only matters what an appraiser thinks because that affects what a lender is willing to lend," said Justen, "The reality is that our industry is being commoditized by the lender community, and that means that a niche development like Eleven Eleven East Pike, which was never designed for the masses, is nevertheless being held back by a homogeneous appraisal market."

Test appraisals for Eleven Eleven East Pike suggest that recent auction activity at nearby projects is suppressing unit values. To illustrate, The Brix Condominiums recently sold three dozen homes at an average of $410 per square foot - that's 30 percent off original asking prices. This dynamic resets market values for consumers and appraisers alike, according to Justen - forcing Eleven Eleven East Pike to compete until higher sales values are established in his building or the competitive inventory burns off.

"With many developers finding the market on price, buyers are now focusing on other considerations like preferred selection, timing low interest rates and seizing perishable tax incentives," said Jones. "The playing field is leveling and sales are increasing."

Jones noted that market observers predicted just this type of scenario, and many buyers have been waiting for it to materialize. "These incentives will evaporate as soon as the inventory does," he added.

According to Jones, Eleven Eleven East Pike was the last new condo project to enter the Capitol Hill marketplace, and given the dearth of new construction activity, no new inventory will likely be delivered for several years to come.

About The Justen Company

The Justen Company provides a single entity to manage and control the entire process of real estate development--vision, feasibility, land assemblage, entitlement, design, and construction. Based in downtown Seattle and led by William J. Justen, the company handles multifamily and commercial projects ranging from tenant improvements to high rise construction from the ground up as well as historic renovations. For more information, please visit www.justencompany.com.

About Realogics, Inc.

Realogics, Inc. is a Seattle-based real estate consultancy, managing member of Realogics Brokerage, LLC. and the creator of Condo Bulk Buy as an accelerated sales division. The group collectively specializes in market research, product development, marketing and sales brokerage solutions for in-city condominiums and mixed-use properties. For more information, please visit www.realogics.com.

SOURCE Realogics, Inc.

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