Condo sales pick up in Chattanooga

Condo sales pick up in Chattanooga

September 2nd, 2012 by Ellis Smith in Business Around the Region

The Bridgeview Condominiums are at the corner of Frazier Avenue and the Market Street Bridge.

Photo by Angela Lewis /Times Free Press.

Chuck Gore unpacks boxes during the first day in his new condo at One North Shore. Gore recently relocated from Houston, Texas, to be closer to family.

Chuck Gore unpacks boxes during the first day...

Photo by Dan Henry /Times Free Press.

Condo occupancy is now back on track after a downturn that saw one Northshore developer go into foreclosure and others flirt with disaster, said George Bright, developer of One North Shore.

"I think the whole housing market has just gotten stronger, starting last fall," Bright said.

Bright has sold $9.17 million worth of condos so far in 2012, and $12.3 million since the market picked up in late 2011, he said.

"We sold seven condos in July, and that's a record," he said.

New resident Chuck Gore said he was drawn to Chattanooga from Houston because downtown fits in with his outdoor lifestyle.

"I'm really into the convenience of everything being just right around me," Gore said. "I saw all the cycle shops, saw the footbridge and waterway, that's what led me to say I wanted to make a change from Houston and kind of hit the restart button, quite frankly."

Gore is part of a new wave of residents hitting Chattanooga's downtown condo market -- a market that was almost suffocated in the cradle.

Several high-profile condo projects put units on sale just as the bottom fell out of the real estate market in 2007 and 2008.

Subsequent price cuts meant that developers would break even at best, and most were forced to begin leasing space that was originally meant to be sold.

The eternal optimism of some downtown boosters never faded, however, even in the worst real estate market since the Great Depression.

Chattanooga didn't experience a crash, it was a temporary downturn or a bit of bad timing, they said.

Now, their faith has been rewarded with resurgent sales.

"We lost quite a few buyers in 2008 when recession hit, but between what's closed and under contract, we're 70 percent sold right now," Bright said.

That's up from 50 percent from June 2011.

"If we were in Atlanta, you'd be lucky to have two-thirds of that," Bright said.

Rising interest

Other developments are reporting similar growth spurts.

The Parkview Condos at Museum Bluffs are down to 14 available dwelling units of the orginal 107, said Darlene Brown, an agent for Real Estate Partners, and the high-visability Bridgeview on Northshore development is down to just three units.

While a large number of occupants are leasing, not buying, that's still a big jump from this time last year.

In 2011, only a third of Bridgeview's units were sold and the rest were leased to bring in much-needed cash, according to news reports.

While price flexibility was part of the equation, the big story has been increased interest from buyers, Brown said.

"People have sat around and not done anything for so long, saying 'let's wait until November and see what happens after the election,' " Brown said. "But when you have interest rates as low as they are, you can't afford not to look at buying a home now."

Units at The 417 on Frazier, which lost former developer Whitehall Properties to foreclosure, is also selling units more briskly, said James Perry, head of The James Company.

Buyers are especially eager to snap up condos that cost from $175,000 to $225,000, on the lower-end of the price spectrum, he said.

"Last year we started getting lookers again, which was good, but they just really were comparison shopping," Perry said. "Now they're actually starting to pull the trigger and submit offers to purchase."

Only one of the original 12 condos remain unsold, he said, though a handful are available on the secondary market.

Rebecca Potts, sales manager at The Terrace at Frazier, said seven of the 16 condos have sold, with "quality traffic picking up tremendously."

Buyers remain mostly interested in the low end, but second and third visits are up, Potts said, which is a good sign.

"To me, that says there are a lot more serious buyers out there than tire kickers," she said.


While residential condo sales are still recovering, retail space in those same buildings is nearly sold-out.

The Terrace at Frazier has been full for almost a year, said Potts.

One North Shore has only two small retail spaces left, Bright said, and is over 90 percent leased.

Linda Carlton, office manager for Keller Williams office in One North Shore, said the firm "plans to stay" in its current location, where it has remained since 2010.

"This is an up-and-coming area," Carlton said. You get a lot of visibility here, you get a great view and and the agents can walk to restaurants. We've even got a park next to us."

Rob Stephens, executive vice president of sales and marketing for logistics company Giltner, said he moved his company into One North Shore because of the convenience.

"We used to be on Lee Highway, and the only place nearby was a sushi restaurant," said Stephens. "Here, there's plenty to eat close by, and there's even a place to bank within walking distance."

He actually lives above his office, and his work commute consists of walking downstairs.

"Good workers have a choice about their work environment, and they're going to choose a place they feel comfortable in." he said. "My business dictates that I need to be close by, and this is about as close as you can get."