Condo Demand in Downtown

[langosta]

https://www.downtownkc.org/wp-content/u ... Report.pdf

It appears that the most recent wave of development, 2013-present, has lacked any condo developments. Almost all condos available downtown were built before 2009 and most in the 2000s appear to have been conversions. Is this a financing/developer issue or is there a real lack of demand? With 3 Light paused, it seems like we won't get an answer for a while.

[normalthings]

That report shows 20 condos are planned for 20th & Walnut "Walnut Row". I don't think that project has been announced before.

[swid]

Is this a financing/developer issue or is there a real lack of demand?

I believe it's the former; to the best of my knowledge (source: memories from a one-hour presentation I went to a year ago about condo buying put on by the DNA), lending requirements are higher on both the condo buyer and the owner/developer looking to build or convert than compared to building and buying SFH.

[earthling]

Is this a financing/developer issue or is there a real lack of demand?

After the last housing collapse, a common trend for multifamily (especially hirises) nationally has been mostly construction with rentals at first that may turn into condo eventually as market conditions show demand. Is easier to initially fill a building with leased units (maybe a few units for sale) then transition slowly to condo than to get financing for new 100% condo upfront, which also may require selling 50%+ units before construction can begin.

[KCtoBrooklyn]

Condos Downtown have been selling pretty quickly and there is not a lot of inventory available. However, I'm not sure if the prices of units that have been selling warrant new construction.

[KCPowercat]

That report shows 20 condos are planned for 20th & Walnut "Walnut Row". I don't think that project has been announced before.

Kind of sounds like the backside of City Club but those were rentals I thought.

[KCtoBrooklyn]

It could be part of the Freighthouse PIEA Development. That will include the SE corner of 20th and Walnut

[DaveKCMO]

It could be part of the Freighthouse PIEA Development. That will include the SE corner of 20th and Walnut

It could also be the Farm to Market building, which had been rumored as a redevelopment site awhile back.

[kenrbnj]

Is this a financing/developer issue or is there a real lack of demand?

After the last housing collapse, a common trend for multifamily (especially hirises) nationally has been mostly construction with rentals at first that may turn into condo eventually as market conditions show demand. Is easier to initially fill a building with leased units (maybe a few units for sale) then transition slowly to condo than to get financing for new 100% condo upfront, which also may require selling 50%+ units before construction can begin.

This is positively correct.

[FangKC]

It's always hard for new condo projects to reach that 50 percent sold rule that banks require to give a mortgage to a buyer. That means that the first 50 percent of buyers have to pay cash. It's probably easier to accomplish this if the project just has a few units in the building -- say 20 units or less. Harder to do if the building has 200 apartments.

[normalthings]

From a quick Zillow search it looks like Nashville new construction mid&high rise condos start at 400k with a sizable number of units between 500-700k and a few $1m+ units per project.

[KC_Ari]

What do people think are the chances of a new condo tower being announced downtown in the next couple of years?

[Anthony_Hugo98]

What do people think are the chances of a new condo tower being announced downtown in the next couple of years?

I think momentum is definitely building. I know the financing requirements for condos are a bitch, something like 1/2 to 3/4 need to be sold before construction can even start. I’d bet we see one pop up before the end of the decade. Location is the real question, where would one go?

[FangKC]

Probably next to the downtown baseball stadium.

[TheUrbanRoo]

What do people think are the chances of a new condo tower being announced downtown in the next couple of years?

Been thinking the same thing recently with all these new high rise announcements. I think Fang is prob right the first ones will pop up with the Royals stadium. I could see some coming in the River Market too at this point since literally everything seems to developing there so rapidly.

[wahoowa]

i'd be real surprised at a tower (like 8+ stories) in the next couple years. condo projects the scale of 423 delaware seem to make a ton of sense to me scattered throughout the core, and we haven't seen one since... ??

[im2kull]

What do people think are the chances of a new condo tower being announced downtown in the next couple of years?

Slim to none. Condos are a nightmare for not just banks and lenders, but also for experienced homebuyers. Anyone well educated and versed on the matter stays away from condos in KC. In large condo rich city's where condo's are the norm that's not always the case, but most condo projects here are not the norm and are a nightmare. There's no indication of that changing in the future.

[langosta]

I would need $600+ per sqft to build condos rougher estimate.

[taxi]

Slim to none. Condos are a nightmare for not just banks and lenders, but also for experienced homebuyers. Anyone well educated and versed on the matter stays away from condos in KC. In large condo rich city's where condo's are the norm that's not always the case, but most condo projects here are not the norm and are a nightmare. There's no indication of that changing in the future.

I agree the chances are slim but your statement about experienced buyers and anyone educated is a gross generalization and simply untrue. Sure, some condo buildings have problems but not all of them. If you're an experienced home buyer and well-versed on the matter then you just do your due diligence. There are some excellent condo buildings downtown. It's not like it's a city issue. The Missouri Uniform Condominium Act is well constructed and provides plenty of protection to buyers and owners. But just like buying a house, there are many factors to consider and it's my experience that most buyers (and their agents) don't bother reading the fine print. And there is a lot of fine print attached to a condo.

[beautyfromashes]

Slim to none. Condos are a nightmare for not just banks and lenders, but also for experienced homebuyers. Anyone well educated and versed on the matter stays away from condos in KC. In large condo rich city's where condo's are the norm that's not always the case, but most condo projects here are not the norm and are a nightmare. There's no indication of that changing in the future.

I agree the chances are slim but your statement about experienced buyers and anyone educated is a gross generalization and simply untrue. Sure, some condo buildings have problems but not all of them. If you're an experienced home buyer and well-versed on the matter then you just do your due diligence. There are some excellent condo buildings downtown. It's not like it's a city issue. The Missouri Uniform Condominium Act is well constructed and provides plenty of protection to buyers and owners. But just like buying a house, there are many factors to consider and it's my experience that most buyers (and their agents) don't bother reading the fine print. And there is a lot of fine print attached to a condo.

But, what's the advantage with a condo in Kansas City verses an apartment? You can get just as nice an apartment as condo for less money, there hasn't been a history of value growth in purchasing them because there really isn't a scarcity of land for new ones or prime locations and being tied to a property with a group of other people seems hazardous to me. Sure, the people that are controlling the HOA could be realistic and nice now, but that could change rather quickly. The risk seems to outweigh any value you receive.