Valet attendants stand poised at the porte-cochere of the Ritz-Carlton Residences as a doorman ushers visitors toward the marble lobby. A scent called "Icelandic Moon Flower" wafts through the adjacent spa. Pathways wind through the manicured lawn and gardens, just steps from a new stretch of downtown Baltimore's waterfront promenade.
By July, the first buyers are set to move in to the Ritz's first-ever condominium-only project, and, for those first units, every last detail will be in place. The builders can only hope their buyers will be as ready.
At a time when the condo market is acutely feeling the housing slowdown, contract cancellations have become yet another worry for builders. Experts say it could be an especially nerve-racking time for those just finishing construction or with the bulk of their settlements still ahead. In Baltimore, several large new condo projects are trying to balance attracting new buyers with holding on to those they've already got.
"There's a fine line a developer has to walk to get these unsold units off the market," said William Rich, a vice president of Delta Associates and director of the firm's condominium practice.
Rich said builders in the Baltimore-Washington region have taken steps ranging from converting for-sale projects to rentals to offering buyer incentives. But lowering prices could prove risky, spooking buyers under contract at higher prices, he said..
Contract cancellations have begun to show up in the sales numbers in metropolitan Baltimore, which had a net gain of just 13 condo sales in the city and Baltimore, Harford, Howard and Anne Arundel counties in the first three months of the year, Delta said.
"Buyers can't get financing, or buyers think that prices are not going to appreciate, so they decide to forfeit their deposits and move on," Rich said.
Developers of the 414 Water Street condo project completed this spring in downtown Baltimore are in the midst of sorting out as many as 125 contract cancellations, said Andrew A. Viola, vice president and regional manager for developer Bush Construction Corp. As of April, 140 of the 314 units had settled, he said.
The project, where condos range from $219,900 to $502,400, had nearly sold out between the end of 2005 and December 2006, with contracts on all but about 30 units. But some investors backed out, while some other buyers no longer qualified for loans or canceled for other reasons, Viola said. Still, he said, he is hopeful that the building, priced in the mid-range for a downtown location, will be sold out by next spring.
