2727 Kirby: Condominium High-Rise At 2727 Kirby Dr.

[TheNiche]

Don't be getting all full of yourself because I remember past discussions. I just have a very good memory. There's nothing special about you, my friend. ;-)

Time will tell, of course, as it always does. But one reason that 2727 MIGHT be an exception to the general suck is that most of its competition did not make it out of the starting gate. There is actually a pretty limited amount of directly competitive product, especially in its neighborhood. And we all know location is everything.

Mortgage markets are everything. It's harder to obtain a mortgage on a condo and those mortgages being issued come with higher interest rates. As a consequence, people are gravitating to houses, townhomes, or apartments, which are easily substituted for a condominium. Plus, every for-sale housing product at this price point is encountering difficulties finding jumbo loans.

And certainly at this price point, houses would be competition with or without a sucky financing situation. Don't forget that the egregiously high maintenance fees (which aren't tax deductible, like interest on a mortgage) associated with condos actually suppresses the price. Were condos fee simple (like most houses), comparison of prices between houses and condos would be apples-to-apples, revealing just how much many options are available to buyers of new highrise condos.

The reason I keep saying that the condo market particularly sucks is that highrise condos don't make a lot of sense to buyers as compared to substitutes for highrise condos. I am not and have never argued that the product or location is poor for 2727 Kirby as compared to other condo highrises. On the contrary, this project was planned and carried out very competently as far as I can tell. THAT is why it got built while other condo projects died on the vine. It is unfortunate that competence isn't enough to succeed in this market, IMO.

If you're going to make the argument that 2727 Kirby has little direct competition and is therefore going to succeed, I'd point at Mosaic and Endeavor as other examples of unique condo highrises with no competition either in their submarket or in terms of their product offerings. Mosaic had tiny units, unlike any of the others. Endeavor had coastal views, unlike any of the others. That uniqueness could not save them.

[JWW]

Is there an opening event this week?

[Gooch]

As a consequence, people are gravitating to houses, townhomes, or apartments, which are easily substituted for a condominium.

TheNiche is probably already aware but... it's worth remembering that housing statistics like months of inventory, housing starts, existing home sales, Case-Shiller indicies, etc. do not include condominiums. Even without them, inventories are still increasing. If condominiums were included the real estate picture would be that much more grim. Best of luck to the 2727 developers. They are going to need it.

[Houston19514]

TheNiche is probably already aware but... it's worth remembering that housing statistics like months of inventory, housing starts, existing home sales, Case-Shiller indicies, etc. do not include condominiums. Even without them, inventories are still increasing. If condominiums were included the real estate picture would be that much more grim. Best of luck to the 2727 developers. They are going to need it.

Just a few thoughts:

1)Case-Schiller doesn't even cover Houston

2)For Houston, the latest inventory numbers are from June, 2009. Total inventory: 45,989. DOWN 14.5% from June 2008. Not sure where you came up with increasing inventories. If your comparing June to May, that's nothing but seasonal. Happens every year.

Also from the latest real estate summary:

Sales of single-family homes for the greater Houston area continued to improve in June, with the highest volume recorded since August 2008 and the highest median price in history.

[Gooch]

Just a few thoughts:

1)Case-Schiller doesn't even cover Houston

Correct. And when I wrote of rising inventories, that would be nationally. However...

For Houston, the latest inventory numbers are from June, 2009. Total inventory: 45,989. DOWN 14.5% from June 2008. Not sure where you came up with increasing inventories. [...] Sales of single-family homes for the greater Houston area continued to improve in June, with the highest volume recorded since August 2008 and the highest median price in history.

I dont' know the source of your stats. But typically, single-family homes does not include condos. While the "latest real estate summary" may paint a rosy picture; it paints a rosy picture only of SFRs. It is not directly indicative of the condo market. The condo market could be completely tanked and not show up in the SFR stats pointed to. Not saying the market is tanked (or not). Just that could be without the fanfare of grim market indicators. I didn't intend to imply anything deeper than that, sorry.

Edited July 29, 2009 by Gooch

[Houston19514]

Correct. And when I wrote of rising inventories, that would be nationally. However...

I dont' know the source of your stats. But typically, single-family homes does not include condos. While the "latest real estate summary" may paint a rosy picture; it paints a rosy picture only of SFRs. It is not directly indicative of the condo market. The condo market could be completely tanked and not show up in the SFR stats pointed to. Not saying the market is tanked (or not). Just that could be without the fanfare of grim market indicators. I didn't intend to imply anything deeper than that, sorry.

No, those were just single family stats. I never pretended or suggested otherwise. (Source: HAR) But I'm guessing there's more connection between local single-family stats and the local condo market than there is between national single-family stats and the local condo market. Predicting the performance of an individual local condo project on the basis of national single-family stats, as you tried to do, is a risky enterprise.

[JWW]

Anyone have info about the opening tonight?

[TheNiche]

No, those were just single family stats. I never pretended or suggested otherwise. (Source: HAR) But I'm guessing there's more connection between local single-family stats and the local condo market than there is between national single-family stats and the local condo market. Predicting the performance of an individual local condo project on the basis of national single-family stats, as you tried to do, is a risky enterprise.

I apologize for my late response, but you ought to check out the most recent press release from HAR. Some tidbits:

...year-over-year decline in overall property sales of 15.0 percent and 13.5 percent for single-family homes...

*Overall property sales includes single family, townhomes, condos, lots, and acreage.

Sales of all property types in Houston for June totaled 6,306, off 15.0 percent compared to June 2008. Total dollar volume for properties sold during the month was $1.3 billion versus $1.6 billion one year earlier, an 18.3 percent decline.

Leases of single-family homes edged up 3.2 percent and leases of townhouses and condominiums rose 8.7 percent on a year-over-year basis.

**This is a national trend brought on by dramatically more rigorous lending standards.

In the greater Houston area, 502 units were sold last month versus 653 properties in June 2008, translating to a 23.1 percent decrease in year-over-year sales.

***Part of the cause here is that fewer people are listing their properties for sale; this has been a trend since 2006. But whether inventories are considered reasonable or not by HAR's public relations staff is probably of little consolation to someone trying to sell a building full of highrise condos. The fact is that if they bring a fixed number of units to a market with a declining number of listings, then they have to be able to capture a larger share of a smaller market (or induce the market to grow by lowering the price point).

The median price of a townhouse/condominium rose to the second highest level ever— $144,500, up 6.3 percent from one year earlier. The average price declined 4.0 percent to $171,007 from June 2008 to June 2009.

****The median price increases as the average price declines. That probably reflects weakness at the higher price points. Not good if you're trying to sell expensive highrise condos.

[diggity]

rumor has it that they've only sold 11 units in that building

[LTAWACS]

rumor has it that they've only sold 11 units in that building

Ugh! Not again!

[JWW]

Before we jump to conclusions, it might be better not to fan rumors about sales without someone actually getting verification before commenting.

When does the building close? I am posting this question on Development and Real Estate too - can anyone explain the process of a building closing (including receiving C/O, financial closings of units, etc).... ???

[TheNiche]

Before we jump to conclusions, it might be better not to fan rumors about sales without someone actually getting verification before commenting.

When does the building close? I am posting this question on Development and Real Estate too - can anyone explain the process of a building closing (including receiving C/O, financial closings of units, etc).... ???

Once all permitted work has been completed and inspected, the Certificate of Occupancy can be applied for. Upon receiving it, the developer can begin the process of converting pre-sales agreements to actual sales. Usually there is a deposit on the part of the prospective buyer, and the prospective buyer can opt to move forward with the purchase with the deposit applied to the down payment or can take that opportunity to walk away. Conversion is a difficult and often frustrating process for the developer, and even if a prospective buyer wants to move forward, the buyer must still obtain financing. The conversion process is mostly wrapped up within the first couple of months of having received the Certificate of Occupancy, and that's when we'll start hearing rosy reports about how quickly units are selling. Thereafter, the rate of unit closings tends to flatten out and resemble a long tail with some seasonal bumps.

EDIT: I welcome rumors, whether misleading or not. An active rumor mill often prompts a response; even the lack of a response is a response.

Edited August 6, 2009 by TheNiche

[JWW]

Once all permitted work has been completed and inspected, the Certificate of Occupancy can be applied for. Upon receiving it, the developer can begin the process of converting pre-sales agreements to actual sales. Usually there is a deposit on the part of the prospective buyer, and the prospective buyer can opt to move forward with the purchase with the deposit applied to the down payment or can take that opportunity to walk away. Conversion is a difficult and often frustrating process for the developer, and even if a prospective buyer wants to move forward, the buyer must still obtain financing. The conversion process is mostly wrapped up within the first couple of months of having received the Certificate of Occupancy, and that's when we'll start hearing rosy reports about how quickly units are selling. Thereafter, the rate of unit closings tends to flatten out and resemble a long tail with some seasonal bumps.

EDIT: I welcome rumors, whether misleading or not. An active rumor mill often prompts a response; even the lack of a response is a response.

Thanks....Can you post that on the development and real estate thread, as well?

[photolitherland]

Photos from yesterday. I also included the development across the street, West Ave.

[bimmerboy]

Kirby has occupancies through the 23rd floor and continues to finish out the upper floors. What this means is that people are living in the building and more will be in soon. It is a process that takes time to move in and close homeowners for many reasons.

Kirby allowed flexibility in floor plans, finishes, and design which attracted a certain buyer segment during presales and construction. Because of the market particular to Houston there remains a sophisticated set of buyers that have to see, feel, and touch before buying. Kirby is built; all but the finishing touches in certain areas.

Because of the economy there will always be some hesitation for many reasons. For some, there will be no hesitation because of factors that effect them directly ( desperately seeking housing because of divorce, sold thier home, just don't want the upkeep costs of a large home.) There are highrise buyers in Houston.

Kirby has been for primary or secondary homeowners. There are few to no investors or investor units.

Conversely, because of the economy again, there will be some buyers who had the will and means and now find them selves with less will and means. Regrettable on all accounts.

[diggity]

are we calling it Kirby now?

Edited August 13, 2009 by diggity

[Geoff8201]

Photos from yesterday. I also included the development across the street, West Ave.

Very nice shots once again! Tell me something, something is off in the West Ave pic... is it mirrored? And btw, even though this isn't the exact right thread I'll comment on this anyhow, West Ave. looks very nice at night with its lighting scheme, got to drive by there last night and liked what I saw.

[photolitherland]

What do you mean it was mirrored? Thats exactly how it looks.

[Geoff8201]

What do you mean it was mirrored? Thats exactly how it looks.

My mistake, I took a closer look. I thought this was a shot from the side nearest Beck's Prime, in which 2727 was facing the wrong way, therefore I thought it was mirrored. At closer glance I see you took it from inside the courtyard area, facing Buildings 1 and 2 looking southward. I guess that's what happens when you have a bout of insomnia and do some 2am Haif'ing

[N Judah]

An atrocious, idiotic street-level interaction followed by a really good one. How NOT to do it right v. how to do it right.

[totheskies]

An atrocious, idiotic street-level interaction followed by a really good one. How NOT to do it right v. how to do it right.

Yep... sounds like pure H-O-U-S-T-O-N

[N Judah]

But really, that facade is one of the worst I've ever seen. It seems almost spiteful towards the idea of street-level interaction. It's a shame too since the rest of the building looks good.

Edited August 16, 2009 by N Judah

[citizen4rmptown]

got these pictures from this thread over at SSP:

http://forum.skyscraperpage.com/showthread.php?t=172683

[H-Town Man]

It looks like an alien ship landed on an 80's department store and is clutching it to carry back to the home planet.

[kylejack]

West Ave reminds me a lot of the Calais apartments, in some ways.

[CHiPs]

It looks like an alien ship landed on an 80's department store and is clutching it to carry back to the home planet.

Hehehehe... Placing some Ivy to cover parts of the facade may help.

[Pumapayam]

But really, that facade is one of the worst I've ever seen. It seems almost spiteful towards the idea of street-level interaction. It's a shame too since the rest of the building looks good.

I totally dig the design.

The whole package is pretty unique.

It could have been worst, like the a stained urinal.

[Jax]

I'm not sure if it's too late after construction has finished to post in this thread, but since it's still in Going Up, and since that's the only section of HAIF I read regularly, I'll post it here.

Here's 2727 Kirby as seen from the Med Cnter.

[fatesdisastr]

Nice of you to bring this thread from the dormant dead Jax lol

[innerlooper]

Noticed big scaffold at 2727 Kirby. Bld is 2 years old? Anyone have info?

Thanks