Murano auction fails to spark condo market

"We are attracting a different customer, a different demographic," Spencer said. "With our customer base, we have found that a better strategy is to work with each individual buyer."

At the current sales pace, it will take 5.6 years to move all the new condos off the market, the Delta Associates' report said.

And it seems clear that the existence of so many unsold condominiums is affecting the rental market, as well.

In a separate mid-year report on apartments, Delta Associates said the vacancy rate in Center City is up to 7.6 percent, from 5.4 percent last year, with average effective rents at $1,787, or $1.76 per square foot.

"Renters are being offered new condos at [rates] lower than the actual carrying charges, just to get some cash flow to the developers," said real estate agent Mel Heifetz, who specializes in apartment and townhouse rentals in the city. "The choices for the renters is a brand-new, unlived-in unit for the same price as an older unit in an unimproved brownstone.

"As a result, and for the first time in many years, apartments are now beginning to sit vacant for weeks awaiting a new occupant," he said.

It is probably safe to say that few expected the Murano auction and attendant hype to be a quick-fix for the sluggish Center City condo market.

"I believe the auction functioned as intended," said Jeff Block, a Prudential Fox & Roach agent. "It moved some units in a building with quite a few to move, and it moved them at more realistic prices than the previous asking, but not at the rock-bottom prices that the naysayers or bargain-hunters predicted.

"I think this particular auction will prove to be good for the Murano and the Center City condo market," Block said. "But I don't think the effect will be immediate or dramatic."

Contact real estate writer Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.