Is there a market here for high-rise living?
Then there is the economy. Salt Lake City weathered the economic downturn better than most cities (its 7.5 percent unemployment rate was more than 2 percent below the national average), but that doesn't mean the metro wasn't hit hard.
"We have seen about a 50 percent drop in prices throughout the downtown core," said Council. "And people are skeptical about buying expensive condominiums, especially when big dollars can buy a fairly large home in the suburbs, with foreclosures and declining prices there as well."
Home prices are still falling in the Salt Lake City metro, Anderton confirmed, but everything is relative, at least compared to some cities where home values are off by 50 percent. "If you look at all residential in the whole metro area, we have only fallen 15 percent compared to peak, which was in the summer of 2007," Anderton said.
As of the fourth quarter of 2010, the Promontory units hadn't come to market. The Regent, which will be completed in summer 2011, is currently being marketed. It offers the most affordable units -- in particular, studios priced at $150,000. These have been sold out, mostly to out-of-towners, either ski enthusiasts or to companies doing business in Salt Lake City and in need of temporary housing for employees.
That brings up the question as to who will City Creek be marketed to? As mentioned, a small percentage will go to the out-of-towners, with the majority of units being acquired by locals. There is a third category of buyer, the LDS faithful, who might want to own property overlooking the Mormon Temple. The Richards Court mid-rises, pricier than the Regent tower, would be most appealing to this group.
"The question is: Are there enough out-of-state Mormons willing to pay a premium for a view of Temple Square?" Anderton asked. "Richards Court is the only residential development right across the street from the square, so it is a unique property."
There is no real answer to that question yet. "Only 13 of the 85 Richards Court units have been closed," said Council. "But, a good portion of those faced the temple. One would assume this a valuable location for some people as they are paying a premium for that view."
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.
|Contact Steve Bergsman:|
|Letter to the Editor|
Real estate market recap, May 25-29
What's Your Home Worth?