Developers Discount Unsold Units in Royal Oak

With some 15 percent of its Royal Oak SkyLofts condos yet unsold, Morningside Group is holding a closeout sale – and knocking as much as $194,000 off original prices.

The developers hope their record-setting discounts on Nov. 3-4 lure buyers to the remaining 14 condos in the 88-unit project built in 2005.

“We had intended to close this out before now,” said David Strosberg, Chicago-based Morningside Group president.

The condos had been priced from $320,900 to $583,800.

“We have had closeout sales before, but the magnitude of the discounts was never this big,” Strosberg said. “We want to … move on to future endeavors. We’re businessmen and want to make a profit, but we have to do whatever it takes to close this out. We’re highly motivated.”

The Oakland County condominium market has been erratic, but improving, according to Farmington Hills-based multiple listing service Realcomp II.

According to Realcomp data, Oakland County condominium sales fell 19 percent in September compared to September 2006, when 168 units sold. As of the end of September, data show 4,083 condos available, and the average days on market was 163.

The condo sales slowdown has prompted other builders to find new sales strategies: Twice in the last year, Neumann Homes has held closeout auctions to shed new condominium and single-family homes from its inventory.

Construction of new projects has slowed, too. The proposed $150 million 10/Ten mixed-use development, which was to have 368 condominium homes in Southfield, was put on hold indefinitely, as was the upscale Monarch development, with 165 condos in Troy.

But Strosberg said his company is not liquidating to move out of Michigan.

“We are still very committed to Michigan,” he said. The company is moving forward with a proposed mixed-use development in Grosse Pointe.

“We’re here to stay,” Strosberg said.

Morningside also developed Liberty Lofts in Ann Arbor, where three of its 68 condominium units are unsold.

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