Splashy condo projects often sink in Baltimore

June 25, 1993|By Edward Gunts | Edward Gunts,Staff Writer

Deer Ridge. Scarlett Place. Belt's Landing. Henderson's Wharf. Pavilion in the Park. The St. James.

And now, the Colonnade. Again.

The July 13 auction involving the 11-story Colonnade at University Parkway and Canterbury Road is the latest in a string of auction sales involving upscale condominiums in the Baltimore area.

Within the past six years, all the developments listed above have been the subject of an auction -- at least once.

Containing nearly 1,000 residences in all, the upscale condominiums that have gone on the auction block range from projects on Baltimore's waterfront (Scarlett Place, Belt's Landing, Henderson's Wharf), to other sections of Baltimore (Deer Ridge at Falls Road and Cold Spring Lane and the St. James at 3701 N. Charles St.), to Baltimore County (Pavilion in the Park off Old Court Road in Pikesville).

In some cases, the auctions were authorized by the developers in an effort to accelerate sales. That's the route taken by the Colonnade's owners when they held an auction in June 1991. In other cases, such as Belt's Landing in Fells Point, they were held by the lending institution that foreclosed on the original developer.

Each auction reinforces the impression that Baltimore is a poor town for condominiums. But that doesn't deter developers from building more of them, such as the 254-unit HarborView tower nearing completion near Federal Hill.

According to real estate executives who have followed the local condominium market, Baltimore has been a stronger condo market than some cities, including Boston and Stamford, Conn.

The chief reasons for slow sales, real estate executives say, are the relative affordability of other types of housing and good roads that make it easy to commute from downtown to almost anywhere in the region in less than an hour.

High city taxes, steep condo fees, and a hesitancy about being governed by a condominium regime are additional reasons why buyers shy away from condos, observers say.

"Baltimore is a provincial town from the standpoint of ever really accepting condominiums as a market, as a form of housing," said Mal Sherman, a real estate consultant affiliat

with the appraisal firm of Lipman Frizzell and Mitchell. "It has not ever folded its arms around condominiums and said, 'That's a neat form of housing.' "

In general, super-luxury penthouse condominiums sell well in Baltimore and condominiums priced below $100,000 sell well, Mr. Sherman said. But condos priced between $175,000 and FTC $225,000 generally have not sold well, he added.

said one of the biggest deterrents to more condo sales in Baltimore is the combination of city taxes and condo fees. They can add $700 or more a month to a mortgage payment -- or more than $8,400 a year.

When surveying their options, he said, many prospective buyers discover that for the same price as a luxury condo, they can buy a sizable house with a yard and no condominium fees. "They find they get more housing for their dollar."

And getting to that house in the country doesn't take very long in Baltimore, noted Robert Lefenfeld, senior vice president of Legg Mason Realty Group. "It's relatively easy to commute to downtown Baltimore from anywhere in the region," he said. "You can live in the valleys and still be downtown in 20 minutes."

Michael Yerman, a real estate broker with Prudential Preferred Properties, agrees that commuting patterns affect condo sales.

"It's not that they're not popular," he said. "People who live in these buildings love living in them. But it has always been a limited market" because other forms of housing are so accessible.

Gordon Greene, president of the Real Estate Auctions division of Sheldon Good and Co. in Chicago, said he believes many of the local condo developers were non-Baltimoreans who made the mistake of thinking that Baltimore and Washington were the same market.

"There's no question that there is demand for good-quality condominiums in the market," he said. "But it was not as strong as some people thought. Generally, there was overoptimism."

The recent wave of condo auctions has influenced buying patterns, too, Mr. Sherman noted.

"The public is very knowledgeable," he said. "When a new project comes on the market, they say: 'Why should I buy? I'll wait for the auction.' "

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