Buy one (condo), get one free?

6/4/2008:

In some markets, such as Southern California, developers have begun using creative tactics to move inventory, like giving away a modest home when you purchase a luxury home.

Would that ever happen in Hoboken? Like buying one high-end unit in Maxwell Place, get a 400k unit over on the west side?

hoboken-cloudscape-maxwell-place-real-estate-news.jpg

Escondido: Buy one (house), get one free

In a sign of how difficult it is to sell new homes in Southern California right now, a San Diego developer is offering a “buy one, get one free” deal, pairing million-dollar homes with less expensive homes.

“We thought, ‘Why does it just have to be on Pop Tarts and restaurants? Why not buy one home, get one free,'” Dawn Berry of Michael Crews Development told 10 News in San Diego.

“Michael Crews Development is offering new, 2000-square foot cityscape row-homes worth $400,000 in Escondido for free — if you buy one Royal View Estate home in San Pasqual Valley starting at $1.6 million. ‘You know it’s a straight-up legit deal; no prices have been increased, there are no hidden costs. Michael is just giving away a free home for people that buy at Royal View,’ said Berry.”

“Adam Rossman of Michael Crews Development added, ‘People have been coming in saying, ‘How can you do this?’ Well, it’s our way of dealing with current market conditions to move some inventory.’ “

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17 Comments on "Buy one (condo), get one free?"


bradykp
Member
bradykp
8 years 3 months ago
[quote comment=”86221″][quote comment=”86218″]This will not happen. The real estate situation here and in Cali is completely different. Cali is one of the hardest hit in the nation and NY metro is the least hit at this time. There may be some incentives as Toll and other have over extended a bit (ie free maint for 6 months, toll will pay closing cost etc) but not to the point to give away free condo’s. There is not that much inventory out there. Also Hoboken has a great fall back, can always convert to rentals. New construction is in for some tough times, to much of the same exact layout design. Your competing with 10 other units exactly like yours. Condo’s in brownstones and smaller building have a huge advantage.[/quote] And what kind of rent will be necessary in order to service the permanent financing on the project like Maxwell Place? A unit that was projected to sell for $750,000 can’t be rented at $3500 a month. The flip-side is that anyone that can afford $4000 per month will probably want to buy. Maxwell was built to be sold as condo. Offering up rentals may bring in some short term cash flow but real estate is a leverage game, and Toll has debt service they need to meet. Monthly rental income won’t cover that. The DB analyst is spot on with his view of Toll. They are still carrying condos at original market price. Great for Maxwell owners, terrible for Toll share-holders.[/quote]… Read more »
bradykp
Member
bradykp
8 years 3 months ago

[quote comment=”86219″][quote comment=”86207″][quote comment=”86196″]I’m sure they can’t drop the price since everyone who already bought would complain. So a freebie might be just right.[/quote]

That’s sort of like complaining to your bank because interest rates dropped after you got your loan isn’t it?[/quote]

You tell me. I’m not a lawyer, but I think that the people who close on their 1125 Maxwell condos would hire their own lawyers to fight it. Not sure how the law works with advanced purchases, but imagine if two groups of people close on similar condos on the same date yet at vastly different prices. Like I said, I don’t how the law works, but in these days anyone can sue for anything.[/quote]

imagine? it’s called negotiation skills. should i be penalized because some schmuck doesn’t know how to negotiate? hell no. i know someone who purchased recently and offered asking price. not even a penny below it. that’s called stupidity. it happens with cars all the time. it’s not like other car owners can band together and say the dealerships are hurting resale values because of negotiations or promotions they run.

that’s the most absurd thing i’ve ever heard.

moephab
Member
moephab
8 years 3 months ago

Toll Brothers reported yesterday a third-straight quarterly loss of $93.7 million

MidnightRacer
Member
8 years 3 months ago

I can see Toll Brothers actually offering row homes built somewhere far away, like the Poconos, as a freebie Buy 1 Get 1 Free promo while keeping 1125 Maxwell at same advance pre-constructions prices others paid. I’m sure the costs out there are a lot less. To give away something in Hoboken, no matter how far back, is a mistake.

homeboken
Member
homeboken
8 years 3 months ago
[quote comment=”86218″]This will not happen. The real estate situation here and in Cali is completely different. Cali is one of the hardest hit in the nation and NY metro is the least hit at this time. There may be some incentives as Toll and other have over extended a bit (ie free maint for 6 months, toll will pay closing cost etc) but not to the point to give away free condo’s. There is not that much inventory out there. Also Hoboken has a great fall back, can always convert to rentals. New construction is in for some tough times, to much of the same exact layout design. Your competing with 10 other units exactly like yours. Condo’s in brownstones and smaller building have a huge advantage.[/quote] And what kind of rent will be necessary in order to service the permanent financing on the project like Maxwell Place? A unit that was projected to sell for $750,000 can’t be rented at $3500 a month. The flip-side is that anyone that can afford $4000 per month will probably want to buy. Maxwell was built to be sold as condo. Offering up rentals may bring in some short term cash flow but real estate is a leverage game, and Toll has debt service they need to meet. Monthly rental income won’t cover that. The DB analyst is spot on with his view of Toll. They are still carrying condos at original market price. Great for Maxwell owners, terrible for Toll share-holders.
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