Real Estate Development Okie Style

Dear Everyone,

I am posting from Oklahoma City. I am here being the only daughter of aging parents. The only mother of the only daughter is talking to me as I type.

Downtown Oklahoma City is an interesting real estate case study. If you had been with me in downtown OKC before I had gray hairs and aging parents, you would have seen a sea of urban parking lots. There wasn't much else. Now there's new development everywhere, from the huge Cox Convention Center to Bricktown, a downtown entertainment area. For you Toby Keith fans, his I Love This Bar and Grill is located in Bricktown.

With all the commercial development, there's also several condo developments in progress. A newspaper reporter queried today why all the new condos were priced at $250,000 and above. The reporter acknowledged that the higher prices brought greater profits, but most modest prices would bring faster sales.

I've heard newbie investors make similar kinds of statements. While I applaud the reporter's concern for those who want to live downtown at an affordable price, his statement shows a lack of understanding. Higher prices in real estate do not always yield greater profit. Since there are several development projects going on at the same time, the competition is on. Buyers will be looking at the location as well as features and amenities. Developers may be forced to grant concessions to buyers to make sure their condos sell. The more concessions, the longer the condos stay on the market, the less profit.

But the reporter offered a gift to potential developers by pointing out a market need for affordable downtown condos. Any takers?

Elaine