Thursday, September 4, 2008

Hokoya Lofts - N William St. Corridor

I've driven past this building, (the Hakoya or Hokoya lofts, even the builders don't seem to know. Marketing 101 people, spell the name right! You say tomato, I say tomoto, I say you're wrong, etc. etc...) a few times, and just saw it pop up on the RMLS. There appear to be 6 2-3 bedroom units in the building, but don't know how many have sold yet, and it appears that all six are still available, albeit poorly marketed. (see RMLS #8082053)

I was a little shocked to see the prices, starting at $300k and going up from there (that's $290 / square foot for this 1034 sq. ft. loft). $300k will buy almost any house in the immediate neighborhood, and I'm pretty sure I'd rather have a yard and basement for my $300k. I'm not sure that this is the greatest location for lofts, but then again there must be a market for new construction/condos/lofts in a more residential neighborhood. I'm not sure why people don't love old houses as much as me, but I guess it's theoretically possible.

Anybody seen the inside or braved the "hardhat tours"? Anybody out there considering one? This stretch of Williams looks kind of funky/hip (and scary in places) but we haven't really explored it yet.

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Non DePlume said...

Ya know Vern?

Greed's a terrible thing, it'll eat ya alive.

BB said...


They won't sell a single unit at that price!!! Insane! Denial?!? Reality check time folks!!!

Those units will sit, empty, until the price drops into the $170k range MAX. Probably more likely to sell 1k sq foot in the $150k range.

My guess is they'll be "rentals" by next Spring. Someone obviously didn't get the bubble memo. Party's over. Sorry!


Sophie said...

I did a quick search of sales in the neighborhood. 8 condos have sold in the area in the last 6 months and 1 is currently pending. The average per square foot sales price is $189.

I do think that is a pretty hot neighborhood right now. I sold a small house close by just recently. The client I was working with used his bicycle as his primary means of transportation to get to his job downtown. He was very specific about location for the ease of his commute and ruled out many popular neighborhoods in NE because even a mile further out was too much.

There is a bicycle culture in Portland that is driving demand for close in property.

The other thing that I think is going on here is that these condos are being promoted as "Green": solar hot water, radiant floor heat, etc, etc. They also have some cool garage door-type windows that open the living area to the exterior. I think the builder thinks that by appealing to the "Green" buyer they will get more for the property because that buyer will be willing to pay more to get the energy advantages. This is an unproven theory and not a good way to price property.

My price recommendation is $189,900.

PDX Outsider said...

Great response SOphie, thanks for th insights. I totally agree that it's a great location for getting downtown quickly. And I think some may pay a bit more for the green touches, but like the rest of you I think $300 / sq. ft. is way too high.

Anonymous said...

Sophie, so nice to hear from a real estate professional on the blog. Maybe you can give me some insight into several issues I have with the RMLS. I am a retired appraiser who spent many hours trying to contact both listing & selling realtors to find out if any seller concessions were included in a sale I was using as a comp. I would say the majority of the time it would take at least two phone calls to get a response. I know this is a real pain for realtors to deal with countless calls from appraisers on a sale. However, I have seen other MLS services which have a section on the listing for sold properties where the realtors can enter seller concessions if they were applicable (I believe stiff penalties should be applicable if realtors fail to report concessions). Seems like doing this would make life much easier for the realtors rather than trying to answer all the appraiser calls. Since I have been out of the business for a few years this change may have already occurred, if not let's hope it does soon. Also in my 25 years in the real estate business 3-6 months marketing time was pretty much the concensus time period indicating a balanced market. I have noticed that the Portland RMLS now indicates that a balanced market is either 6-8 months or 7 months depending on what month you look at. Other MLS services I checked indicate that 5-6 months market time represents a balanced market. What gives? I believe this manipulation of the marketing time for a balanced market casts serious doubt about what other numbers RMLS is providing.

Sophie said...

Let's see if I can answer your questions.

It is my habit to return all calls immediately, and this includes calls from appraisers. So the issue of agents not calling back is one of professional standards and I hope all Realtors will promptly assist appraisers. After all, most sales involve a mortgage and that involves an appraisal. I need your help just as much as you need mine.

The issue you bring up about having full disclosure in the RMLS about seller concessions is one that my office has discussed at length. I defer to my Principle Broker on this one. What I have been told is that this sort of disclosure can only be done with written consent of the seller. So for a Realtor to use the RMLS to tell appraisers that the seller paid buyer closing costs, or something similar, would require documentation to allow it with signatures. That is a complication that probably makes it more of a hassle than the current telephone call method. Although if our listing forms had the proper wording, it could be handled early on in the listing of the property. We just aren't there yet.

As for months for a "balanced market", I would never go back further than 6 months. The market is more dynamic than that. And again, I think that comes down to professional practices.

Anonymous said...

Sophie, thanks for your response. First I would seriously question your brokers opinion that the release of information in regards to seller concessions would require written consent by the seller. Concessions (which I hear are very common in the current market) have the effect of inflating sales prices. In the current enviroment with many lenders in financial trouble, I believe lenders want to know what the "real" sale price was for comparable sales used in the appraisal. Say for example a house sells for $300K & the seller pays $9,000 of the buyer's closing costs (& or buys down the interest rate on the new mortgage & includes a new refrig & freestanding range. Now you have three similar transactions which are used in an appraisal. The bank is making a 95% FHA loan & since the above information was not provided by the RMLS or realtor. In affect the lender is now making a 98-99% loan. I believe most lenders would want to know this information before making this loan.

In regards to the balanced market issue. I can not remember a time other than the early to mid 1980's where marketing time in PDX was over 6 months (at least not for any significant period of time). This is not including current market conditions, which to me are similar to the early 1980's. If PDX realtors & RMLS want to stand by their recently published 6-8 or 7 months marketing time representing a balanced market, please provide historic data to back it up. All appraisal forms I have seen indicate 3-6 months marketing time represent a balanced market. I also believe that the RMLS at least 2-3 years ago used the 3-6 month figure. When market conditions changed the RMLS suddenly changed how they defined a balanced market. Taking 6-8 months to sell a house historically represents an oversupply which many times is also a leading indicator of a declining market. Lets hope realtors & appraisers do not continue to provide more misinformation to lenders, many of whom are in dire straights in part based on faulty appraisals.

bearlee said...

How's this for price reductions and equity dipping: mls #8009198

I drive by this one on my way to work each day. Initial listing price $450K, reduced to $399K, and now listed at $300K.

Purchased 08-01-1989 for $35,950.

And now it's a short sale.

John said...

People were willing to pay extra for "green" during the bubble when the "its not my money" mentality prevailed. Now that they might have to actually pay the loan back they want "green" only if it is free.

Earth advantage did a study (kind of like those Oil company funded global warming studies) that showed that green certified homes sold for an average price of $223 per square foot, versus $185 per square foot for non-certified, traditionally built homes, according to the Regional Multiple Listing Service (RMLS) in bubble times. There are probably a bunch of reasons that those stats are in question but there WAS probably some extra value given by the market during the bubble. I don't think the market will pay a dime for it now.

john said...

Williams 5 condos are now renting...

lisa said...

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