Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 31, 1991 TAG: 9103290692
SECTION: BUSINESS PAGE: E-1 EDITION: METRO
SOURCE: Sandra Brown Kelly
DATELINE: LENGTH: Long
Little has been traditional about Chateau Mont, the three-story stone, brick and stucco structure high up in the prestigious Hunting Hills subdivision.
There are 9 unsold units in the 24-unit building, and the developer wants them moved. To get them off the lot, so to speak, thousands of dollars have been lopped off their prices. The $178,000 unit is down to $149,950; the piece de resistance model unit can be had for a mere $399,500, a fifth off the original $477,500.
A sheet of discount coupons advertising the sale was delivered with yesterday's newspaper, but a select group of folks got their "special customer" notice a few days ago. They were invited to beat the public to the dotted line.
The "by-invitation" special customer is important to Chateau Mont. Roanoke has limited demand for a lifestyle that includes a concierge to take in the dry cleaning in exchange for monthly homeowner fees up to $300.
Chateau Mont was a project of Bradhill Corp., which is developer Bob Bradley, a University of Virginia architecture graduate, and Glenn Thornhill Jr., president of Maid Bess Corp., a clothing factory. It was promoted by Boone & Co., a leading Roanoke Valley real estate firm that had developed a town house project adjacent to the Chateau Mont site.
The project was fine-tuned in marketing focus groups and hailed at exclusive events designed to draw Roanoke Valley Brahmins to the 1.8 acre site.
For example, in September 1987, Bradley got the Roanoke Symphony to hold a sunset concert on site to raise money for the symphony. Dress was black-tie. The symphony played Samuel Barber's "Adagio for Strings" as the sun set over southwest Roanoke County. Symphony conductor Victoria Bond looked into the mist that veiled the valley and spoke of Valhalla, the mythical hall where ceremonies recognized the souls of battle heroes.
About 3,000 people got an invitation in April 1988 to visit the site, see the plans and reserve a condo with a deposit of $25,000. Bradley said then that he wanted the reservations so he could "sleep at night."
Not too many months after he said that, there were many real estate developers sleeping less soundly as they tried to market their products to a public grown wary because of a generally unstable economy.
Bradley was out of town last week, so there's no indication how soundly he's been sleeping lately. But his broker, Len Boone, said it was "a simple business decision" to hold a clearance sale.
"There's nothing rare about this. If you've got something and want to sell it, there is a price in any market that something will move at," said Boone. He set the sale prices and hopes to have the last unit sold in four weeks.
Boone said there was a strong real estate market when Bradley made the decision to develop Chateau Mont, and the outlook was that it would stay strong. "Unfortunately he got caught. A lot of people got caught," said Boone.
And when a developer gets "caught" he or she has only so many choices - ride it out, or cut losses by cutting prices and selling.
Boone said it takes about 1.5 percent of the cost of a project to carry it per month on the books, so a developer or builder has to decide: sell, or wait, never knowing how long the wait can be.
"Bob is going to lose money," said Boone. "That's what speculation is."
Boone knows what he's talking about. He has not been able to sell a spec house he built more than a year ago in his Hollins Court project in north Roanoke County. The house, which has a first-floor master bedroom design, has been reduced by $40,000, to $249,950.
It will not be a "black ink" experience, Boone said.
The last year was not the sort of climate in which "you lost a sale over a refrigerator," said builder William R. Reid.
"I'm not rolling out the discount, but I'm being more accommodating," said Reid, who has speculative houses for sale at $324,950 and $289,000.
Accommodating means that if a prospective buyer asks for a refrigerator, washer and dryer to be included in the sale, the buyer might get at least one of them.
Accommodating also means that everyone in the network that it takes to get a house built is looking closer at the profit margin, and taking a little less profit than when times are more promising.
However, home sales are beginning to pick up, the builders said.
Boone said he has sold 10 new houses in March, one at $407,000.
Builder David Vaughn, who doesn't build houses for less than $200,000, said the people who were just looking prior to mid-January are now writing contracts.
"I'm seeing things pick up at a good pace, but at a slow steady pace," said Vaughn.
He said a good sales year for him is $5 million. In 1990, he sold $3.7 million, and he offered some discounts to make the sales. Already this year, he has sold $2 million and gave no discounts.
So, sale time may be ending, which means the chances for a free refrigerator are diminishing. But, ask for the washer and dryer, too. You'll never get it all. That's just business.
by CNB