Project Marketing Introduction and Executive Summary
The current Condominium Marketplace in Calgary is presenting challenges and surprises to stakeholders in the real estate community, whether they are buyers, sellers, project developers, Realtors, appraisers or lenders. Many uncontrollable variables are creating downward pressure on pricing and decreasing overall sales volume. In this environment of market uncertainty it is essential to have the experience, expertise and proven sales performance track record of a Senior Real Estate Professional and his team working with you to achieve sales goals.
This proposal is intended to provide you the developer with information, expertise and access to the proven marketing and sales benefits of Richard & Liz Bergeron’s personal inner city condominium specialist brand, the Multiple Listing Service (MLS) and Calgary Realtor cooperation.
By capitalizing on the success and track record of Richard’s 20 year target marketing program to the Eau Claire and Connaught areas, you will gain the additional leverage required to generate the sales traction necessary to overcome Calgary’s existing market conditions. Given the current levels of available condominium inventory and existing absorption rates, your Projects can realize a sales rate of 2.5 units per month by utilizing Richard Bergeron’s real estate services and expertise and utilizing the Multiple Listing Service.
The goals of reaching a larger percentage of the buying public with reduced advertising costs and increasing current sales levels will be achieved through a strategic analysis of the inner city condominium real estate market, reviewing existing pricing structures for both projects if required, hosting weekend open houses for the public and offering competitive compensation to Calgary’s Realtor community.
Situational Analysis and MLS Data Review
According to Calgary Economic Development’s State of the Economy Report, Calgary has a very strong labour force – educated, highly skilled, highly paid – all of which the city has a healthy demand for. Calgary is a head office city, and those typically weather economic storms better than branch-plant locations and the number and magnitude of major capital projects underway and expected to last for two to three years is significant. These factors will help buffer the impact of the current global economic downturn, although its impact will be still be felt in Calgary’s real estate market.
Based on MLS data, the Calgary Real Estate Board (CREB) projected the number of condominium listings in the city to rise by 5%, sales volume to decrease by 5% and prices to decrease by 5%. Current absorption rates in the city are approximately 10 months of inventory, assuming no new listings were to come onto the market.
It must be kept in mind that the CREB forecast projections are for the entire city, and prudent market analysis dictates a thorough review of the community micro-markets that the project is located in. For this reason a statistical breakdown of the districts of Eau Claire and Connaught are listed below.
2008 saw 46 condominium units sell in Eau Claire compared to 80 sales in 2007, a decrease of 42%. The average sale price for 2008 was $721,364, compared to $758,320 in 2007, a decrease of 4.9%. Inventory of condominiums listed on the MLS rose in 2008 over 2007 by 10.6%.
Pricing for suites at the first project begin in the $700,000’s. 2007 saw 34 suites in Eau Claire sell over $700,000 and in 2008 17 suites sold over $700,000. As of January 26, there were 17 active listings in Eau Claire listed at $700,000 and above. Competition in the market among sellers is evident in that 8 of the 17 current listings have had price reductions averaging 15.6 %.
2008 saw 262 condominium suites sell in Connaught compared to 496 sales in 2007, a decrease of 48%. The average sale price for 2008 was $318,056 compared to $333,302 in 2007, a decrease of 4.8%. Total inventory of condominiums listed on the MLS rose in 2008 over 2007 by 10.6%.
Pricing for suites in the project begins in the $500,000’s. 2007 saw 6 suites sell in Connaught over $500,000 and in 2008 4 suites sold over $500,000. These numbers of course do not reflect the many condominium units sold directly by builders in the community of Connaught as well as Victoria Park, were numerous condominium projects have been marketed.
In both Eau Claire and Connaught the total volume of sales are down over the previous year and available MLS inventory is up, combining to put additional downward pressure on pricing for sellers.
Of benefit to the market are the recent announcements of delays or cancellation of several inner city projects, decreasing the amount of inventory scheduled to come on stream in the next 24-36 months. Current projects with available inventory to sell will be well situated to take advantage of the market upswing when demand increases.
Buyer Profile and Target Market
Typical buyer profile characteristics for the projects are listed below:
- Affluent inner city dwellers who wish to enjoy the lifestyle and social advantages of these outstanding locations.
- Middle aged city dwellers who have become disillusioned by the limitations placed on their lifestyles by lower quality developments.
- Empty nesters who are experimenting with the inner city lifestyle.
- Young affluent move-up buyers and couples without young children.
- Upper management level professionals who have homes in the various cities they have branch offices in.
- Well educated individuals who enjoy expensive toys.
- People who enjoy entertaining in their home and cooking for friends.
- Technologically savvy.
- Potential purchasers will be employed in white collar and professional occupations. The majority will be employed in the inner city. As with the affluent inner city dwellers, this well-educated, younger market segment has gravitated to the inner city to enjoy lifestyle and social advantages.
- Discretionary income is high.
- Price and value fulfillment are the two items that a condominium project offers to buyers. Given the current amount of inventory in Calgary, it has been said that sellers are fighting a pricing war in the middle of a beauty pageant. The importance of being competitively priced can not be overlooked, nor can the importance of recognizing the values that are important to buyers. These values, simply put, are what prospects understand and accept as being important to them. Many of these value characteristics are highlighted in the buyer profile.
- Successful marketing of the projects will showcase and magnify the features and amenities offered by these two projects to resonate with the target market’s values.
- Along with material goods, location and inclusions, we must never underestimate the importance that purchasers place upon subjective issues. Issues such as after sales service, clarity of communication with the developer and their representative and their commitment to make the experience of purchasing a new home one of the truly rewarding and memorable experiences of the purchaser’s lifetime can factor into the buying decision for many purchasers.
- You have a strong reputation of providing outstanding client service, exceeding client expectations and building a market superior product. Bringing these standards to the attention of prospective buyers will be key in achieving the projects sales goals.