The Sun Sets on the Phoenix (condo) at Noon 
The Many Woes of Phoenix condo in Clarendon Village of Arlington VA
A Would Be Owner in Phoenix Condo Tells All and Walks Away....
Email received July 30, 2007:This story has been removed at the request of the writer who is involved in The Phoenix. Their attorney decided it would not be appropriate at this time to be published....Sorry everybody because it was an interesting story.
Hopefully some others will tell us what they're going through and give us an idea of prices and delivery issues.
What is your story on the Phoenix Condo in Arlington VA?
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Date: Monday, July, 30th 2007 @ 03:34:00 PMViews: 4558
This blog entry currently has 23 comments posted.
million
Jay,
i didn't see the story before it was removed but it appears (no real source for my perspective) that the market turned and flippers are set to take big losses. sounds like a risk they were willing to take, well now that risk has materialized. time for Plan B, which apparently is to sue the developer and/or forfeit their deposits.
Jay Seville
Million,
The several individuals I've spoken with were not investors. However I've only spoken with 4 parties, and there are many more than that involved.
Jay Seville
Anon1,
Your info for Chris was sent to him directly. I did not want to post it directly here on the blog (name and phone #) for various reasons.
million
suuuuuuuuurrrrrrrrre they weren't flippers 
honest owner/occupants, right? in that case, they simply overpaid which was a result of not doing anything resembling due diligence. would they refund the difference if the market exploded upward again? no, they'd resell and pocket the profit and brag to their friends about how brilliant they were.
Cindy
I'm looking to buy a new condo in the Alrington area and was considering The Phoenix. Should I be concerned? Not sure I follow what the issues were. Any feedback would be great. Also, any other recommendations for newer condos in the Arlington area. Thanks.
million and one
you are correct that the purchasers failed to do proper due diligence. However, do keep in mind that at the time, the developer was not allowing buyer's agents, so the most common source of due diligence was prohibited by the developer. Also, the bigger issue here is that (1) the contracts do not provide for any form of mutuality, which is required for a valid contract and (2) the appraisals used to qualify purchasers for the loans (in fact, are REQUIRED to close the loan) are not being done properly and are being expedited due to the preferred lender's relationship with the builder. As an example, if the market had exploded and the builder chose to sell the building to a REIT, the purchasers would just get their deposits back. If, as is the case now, the purchasers fail to close on their places, they stand to lose their deposit as well. Essentially, the ONLY thing at risk is the buyer's deposit. How is that a valid contract with mutual consideration? It is not. Purchasers should have done more due diligence, but the bigger issue here is that the developer is acting in an unlawful manner with buyers. To avoid getting these contracts voided by a court, the developer should agree to make reasonable market adjustments to the purchase price.
Jay Seville
Cindy,
Welcome to the area. I'm the one who writes these articles including the lists of Overpriced Condos. Do fill out my contact form at the top menu bar to start communicating about buying your condo and I'll give you my thoughts on what the different condos bring to the table.
jay
Remax (I'm putting this in here because people contact me all the time wanting advice that don't realize I'm a realtor and this is how I get just about ALL of my business. I've even been asked by callers advice on what realtor they recommend. Funny stuff!
Jay Seville
Interesting, Million and One. I'd like to know at what prices Phoenix is delivering their condos. Anybody know?
I did write later in 2005 one should not buy a new construction condo for awhile. ...Some have been offered lately for more reasonable prices though. Everything is all case by case and due diligence should always be exercised in determining market value and the variables you bring to the table such as how long you plan on owning the home, etc.
Chris
Here's the situation as I see it. Yes, pre-construction buyers knew what they were getting into. However, it's in the mutual interest of both the buyers and the developer to close as many pre-construction units as possible, to control inventory and protect the value of unsold units. If the values in the area are lower than pre-construction prices, they're only going to go down even more when pre-construction buyers walk away and increase the supply even more. But this developer is doing the opposite. They are playing EXTREME hardball with pre-construction buyers, forcing many to walk away. And we ALL know that the second they have resolved all pre-construction deals, one way or another, they are going to lower prices and start offering upgrades, free condo fees, etc. That's going to drive prices down EVEN MORE, putting the screws to pre-construction buyers even more. What's the incentive to close? There is NO incentive. I'm stuck... I'm going to settle. But I have to say, I have never dealt with more incompetent, dishonest people than those at the sales company handling this building. Think long and hard, especially if you don't plan on living here for several years.
Matt
Who is the agent/listing company and who is the builder for this project?
Ashton Heights
Chris, there's nothing the developer can do to protect the "value" of the unsold units. Value is based on basic supply and demand. Once it's been built, the supply is out there. I suppose if they destroyed half of the unsold units, the value of the other half would go up. But that ain't gonna happen. And demand is what it is. I suppose they could advertise like crazy to increase demand. That's about all.
Look, ~24 months ago, you and the developer agreed to a price on a condo to be delivered within a certain timeframe. It appears that they delivered on their end so what exactly have they done that's dishonest? Did they promise you that the value of your place would be higher than the price you agreed to? All I can see is that they are unwilling to renegotiate something that the 2 of you previously agreed to. What about that is incompetent or dishonest?
Anonymous
The Phoenix project has many issues that include sub-standard materials in the condos from those advertised, allegedly forcing the inflation of appraisals so the loans will go through, not getting all of their certificate prior to scheduling walk throughs.....Just a lot of negligence in the name of getting their money. I'm betting that the only appraisals that have valued at near the sales price have been through the preferred lender. No bank in their right mind would approve a loan for the Phoenix based on the sales prices that people contracted in 2005. This is even under bigger scrutiny now that it's on the news every day about the housing slump and how sub-prime as well as prime mortgages are in trouble leading to foreclosures. Note that inflating the appraisal to obtain a loan is flat out illegal. The developer should be careful about a county audit on their business practices. Anybody who closes on a condo at the Phoenix at the 2005 price will be instantly in the hole and will not recoup to EVEN for a few years. Why would you knowingly put yourself in that kind of debt instantly? Now if Phoenix lowered their pricing to the market (which they won't until they close on enough 2005-priced units), the story changes. Don't let the developer bully or scare you.
Ashton Heights
So they're playing EXTREME hardball. Is that such a crime? Wouldn't you do the same if you were them? Would you really lower prices for everybody, just to be nice? No. You would force everybody who signed contracts to either close or forfeit their deposits. THEN, lower prices on all the remaining unsold units. I don't think there's anything illegal about that.
Everybody who signed contracts at the Phoenix neglected to compare the cost of owning to the cost of renting. If they did, they would have found that owning was much more expensive than renting at the prices the Phoenix was demanding. Or maybe they did do their calculations and still thought it was worth it.
Jane Doe
What everyone fails to realize is that the sales team (McWilliams Ballard) is more on the dishonest end than anyone else involved in the development and management team here at the Phoenix. After settling I walked through several open houses and read the literature only to realize that the prices have dropped so dramatically that there is no way to recoup any loss. The sales agents are very slippery and clearly evasive. I asked them why half of the items on our punchlist weren't done and they insisted that nothing was wrong with the unit. I have a window that was obviously meant to be a sliding door, it has latches and is installed on a track. Apparently the measurements taken were all incorrect at time of installation so they slapped up walls and let it go. Every time I hear them schmooze and suck in prospective buyers, I want to scream, "DON'T DO IT!" Also comes the designing factor. I have no idea who put the sales team in charge of the interior decorating, but they have no clue how to match color schemes, they put up used books in the library that are obviously trashed, pictures that are obviously scarred and not new, and obviously cheap accessories.
I don't quite understand why I haven't been able to get through to the development team that the sales team is only hurting them. Any other residents, please feel free to post as I know you have some of the same concerns.
Jay Seville
Jane I copied your post to the most recent post on the Phoenix Condo--you can search for that towards top of the blog homepage as some of your fellow owners have spoken there.
Scott Montgomery
Jay- Great blog- Im converting my site over to a blog platform and really like what youve done- soon Ill be unveiling mine but in the meantime I will enjoy yours!
Alex
I am in the market for a condo, but, are the current pricing applicable to the current conditions of real estate market?
Jay Seville
Alex, that depends on which building and unit you are talking about. For a brand new 1BR, the prices at The Phoenix are competitive, and they are new. If you're talking about the market in general...well you can't answer that question too well. It's all case by case. Give me a specific listing and I'll tell you if it's realistic (priced high or just right or really good deal) or not.
almost a gold rush
Jay Seville
Yes it has been somewhat of a goldrush--at least on the larger units. I have somebody under contract on 975 sq ft with panoramic views 1BR+den for a great price. In the tax records many have paid $480,000-$490,000.
Floaters are paying up to $660,000 for the 1335 sq ft. Why would the sales staff sell those larger units for much less to a floater (unrepresented buyer) when they know they can just sell it high next week to a different floater. The best sales prices are reserved for buyers who are represented by specific agents--it's in the Seller's interest to keep the best prices in the hands of their favorite agents that way most people pay much more for the same product. Certain agents bring multiple buyers closing multiple units so they get better deals that one time floaters. Common sense. For the same size units there have been over $100,000 difference in price paid this year by buyers. I saw the same thing at Monroe. And having an agent doesn't necessarily do anything for you because of sucky agents.
Here's a piece on the subject:
http://www.justnewlistings.com/arlington-virginia-blog/jay-seville/ouch-buyer-lost-40000-dont-be-a-floater-dude/show/
Jay Seville
And for what it's worth, sales have been brisk at the Phoenix in case you were interested.
Don
WOW.SALES ARE BOOMING AT PHOENIX CONDOMINIUMS.ALREADY 108 UNITS SOLD IN A VERY SHORT PERIOD OF TIME.GREAT INVESTMENT.GREAT LOCATION. http://www.arlingtonva.us/Departments/RealEstate/reassessments/scripts/saleslist.asp?Action=View&nbhd=250003&lrsn=65470&backRPC=19006169
Chris
This post is a bit confusing. First you said the Phoenix said "sue us," then said they let you out of your contract. Which is it? And if you got out... what is Mark Graham's number!