“Pricing Integrity”

June 16, 2011 | Comments Off on “Pricing Integrity”

A 32-unit project in Chicago called the Renaissance is getting some attention partially for its unique, no-bargain pricing strategy. Developers have dubbed it “pricing integrity.”

The units at the development are priced between $249,900 to $349,900, and the development does not offer any discounts on the price. This differs greatly from many other developers who have currently cut prices or offered up big incentives in trying to lure buyers.

However, at the Renaissance, developers will offer financial assistance with closing costs but they stand firm when it comes to offering no big discounts or incentives.

Hasani Steele, an @Properties real estate professional and development consultant, says they instead focusing on educating the buyer on the property they are purchasing and justifying why they are paying the prices they are.

“It appeals to a certain type of buyer,” Steele says. “I’d sit down with people and I’d say, ‘This is the price.’ What you’re buying is not just an individual condo. What you’re buying here is partially like a partnership with the other people in the building. You’re buying into the ward’s vision.”

He realizes back in the housing boom days “pricing integrity” wouldn’t have worked.

“People didn’t care about the finishes because they thought they’d rent it out or they’d flip it,” Steele told the Chicago Tribune. “We wanted to get people emotionally tied to the product, and they’d love it and they’d buy. People will go into debt for things if they genuinely love it.”

The strategy seems to be paying off: In a sluggish housing market, only three of the 32 units at the Renaissance remain for sale.

Source: “‘Pricing Integrity’ Paying Off for Developers,” Chicago Tribune (June 5, 2011) and www.Realtor.com


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