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January 27, 2009

Buyers Just Not That Into Luxury TICs

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Got a luxury tenancy-in-common (TIC) building you’re ready to sell? Keep this in mind: Buyers are just not into luxury TICs these days.

TICs were traditionally a way for first-time home buyers to get into the housing market. So TICs priced well above $1M are facing particular challenges.

Case in point: 1278-1282 Church in Noe Valley. These three TIC interests hit the market in July 2008. Though the developer did a great job with the floor plans and finishes, the property has had poor sales luck. The two-level unit with the deeded yard sold for under the $1,395,000 asking price in September. But the other two units were withdrawn in December. (Both had accepted offers at one point, but the contracts fell out.)

The top unit is back on the market for $1,165,000, but the owners haven’t officially brought the middle unit on; they may rent that out if no buyers materialize. Its last official price was $1,179,000.

But in an age of loan defaults and job losses, do buyers want to be on title with other owners? Condo prices are dropping, and buyers have their pick of units in this price range (not to mention houses). Though many TICs did sell for above $1M over the past year, many more such listings have been withdrawn.

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