Joining Curbed today for the second of four "open threads" is real estate marketing and developer services pro, @properties' Peter Olesker. He's kind enough to have volunteered his time and expertise with the goal of resolving reader questions on the real estate market, development trends, and/or the advertising process. As with last week's installment, we've gotten the ball rolling for y'all. Here's how the thread works: pose any and all relevant real estate questions to Peter in the comment section between now and Sunday night, and he'll have answers for you—also posted below—come Monday afternoon. It's meat-and-potatoes time for all your big-picture real estate questions. OK then, lets get 'er rolling...
Curbed: Who does @properties advertising try to reach and what's the primary tactic for doing so?
The short answer is everyone. We're trying to reach our clients and prospects a hundred different ways. We might be having one conversation with a very wide audience on one level and another conversation with a specific person, in a specific location, looking for a specific type of home on another level. As far as tactics, it's a lot of online but also print, direct mail, e-mail, and let's not forget about the good old fashioned yard sign (it still works). A lot of companies have scaled back print advertising or abandoned it altogether, but we still find it effective. There's a branding component to print that you can't achieve in a text ad on Google. A lot of people have gotten to know @properties through our print ads. They show our independence, our love for Chicago and the fact that we don't take ourselves too seriously.
Curbed: Lately there's been a real estate ad blitz on television from companies like Coldwell Banker and Zillow. Should we expect to see more and more of this, and is it a function of a crowded online marketplace?
It's a function of a couple of things. One is the market recovery. People are buying and selling homes again, so there's a bigger pie for these companies to go after. The big national brokerages like Coldwell Banker are going to spend ad dollars in an attempt to shake the trees and gain market share. Zillow and Trulia are locked in battle to own online search and attract ad dollars from brokers. All three of these companies are public, which means they're under pressure to show growth. So it's no surprise that you're seeing more aggressive marketing. As a local, independent firm, we've had to employ a different strategy. We doubled down on marketing when everyone else pulled back during the recession. Making that commitment to our agents and our clients during a tough time really struck a chord. Now, we're highly focused on marketing at the local level and leveraging technology to give our agents and clients a competitive edge.
Curbed: It's tricky thinking of real estate as seasonal, but there are peaks and valleys in both sales and rentals. How dramatic are these ups and downs in activity in a normal year? Have you or the firm ever panicked during a longer-than-expected lull?
It's hard to remember what a normal year feels like. The boom years weren't normal. The bust wasn't normal. The artificial stimulus of the housing tax credit wasn't normal. And the void that followed wasn't normal. Now we're dealing with abnormally low inventory levels. This year, we saw the "spring market" get underway in early January.
I think real estate brokers have given up on "normal" and have gotten a lot smarter about catering to their clients' needs at any given moment in time. We don't necessarily know what's around the next corner. We just know that right now is an unbelievable buying opportunity, and fortunately, conditions are such that sellers are starting to see a way through as well.
As far as panicking, personally, as someone who bought a home in 2006, with two small mouths to feed, I'd be lying if I said I never panicked. But speaking on behalf of @properties, the real estate downturn wound up being a watershed event. Because Mike Golden and Thad Wong (@properties' co-founders) didn't panic, because they were opportunistic and invested in the company and its brokers throughout the downturn, @properties is twice the size today as it was in 2009 and last year enjoyed its best sales year ever.
Curbed: Rental construction is booming downtown. Small neighborhood condo projects are back in action. And sales in existing buildings seem to be doing better than a year ago. What do the numbers say about these trends' staying power, and when is the industry expecting to see large scale condo construction again?
We just completed a comprehensive study on condo-sales activity in downtown Chicago, and our outlook for the for-sale market is very positive. Last year the number of home sales citywide was up about 20% from 2011, but sales of condos in the core downtown neighborhoods jumped by more than one-third. We saw solid gains on a price-per-square-foot basis in Streeterville, River North, the Loop, the West Loop and even the South Loop. I think we'd be looking at even better numbers if we had the inventory, but in the West Loop for example, in the month of February, there was only a 45-day supply. Two years ago there was 16.5 months. On top of that, we're seeing really exciting things happening downtown with major employers setting up shop and strong retail investment in the neighborhoods.
As far as new construction, it may be a while before the next 200-unit condo high-rise breaks ground, but for boutique projects in "A" locations, the demand is there. Over the past 18 months, we've seen the 6- to 12-unit projects done successfully. Now, we're starting to see the plans for the 30- to 40-unit deals. Sandz Development is getting ready to start a 100-plus-unit luxury adaptive reuse project (essentially new construction) in Lincoln Park. And we've seen strong sales in the projects we represent. The Chicago condo buyer with the means to purchase new-construction is starving for innovative product, because it's been almost a decade since pencil was put to paper with this buyer specifically in mind. That's an interesting opportunity for architects and developers, and it's something we're excited about.
·Peter Olesker, Executive VP of Developer Services & Corporate Communications [@properties]
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