I've gotta believe condo developers are trying to unload their units like Arizona Cardinals tickets after the first quarter.
And I've gotta believe that folks who signed purchase agreements and put $$$ down are contemplating walking away from that investment, cutting their losses.
And it's not just Miami, San Diego and Phoenix. Dallas chimes in here:
After peaking at a 963,000 annualized rate in June, U.S. condo sales are off by 11 percent; they hit 857,000 in November. Speculators' tempered enthusiasm has driven price gains down to 10 percent from 18 percent in June.
Most notably, condo inventories have doubled in a year and a half. In June 2004, inventories were at 218,000 units and running at an ultra-skinny 3.1 months' supply. As of November, the number of condos on the market is at 423,000, or 5.9 months.
Local real estate types tell me that out-of-staters are behind much of the oversupply that's set to flood the market next year and the year after. They say some of the behemoths under construction have been sold to more speculators than future residents.
I've got news for local developers: Speculators are dumping condos from Vegas to Miami. Some buyers are breaking contracts before construction is complete.
The reality is, local buyers are in no shape to ride to the rescue of the current oversupply of condos, much less any elephants-to-be reaching for the sky
December 31, 2005
Dot-Condo Update: Condo market is due for a checkup (elephants-to-be reaching for the sky)
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5 comments:
Interesting to see Dallas foreclosures this year as high as they were back in 89. Texas real estate really has never totally recovered from their collapse in the 80s and 90s. Neither has Japan.
Are there any nationwide statistics available that show:
1. Percentage of real estate contracts with contingencies that the buyer will sell their own home first before closing on the new deal?
2. And the percentage of these deals that fail because the buyer couldn't sell his first property?
I imagine we'll see a chain effect and spiral effect of unsold contracts that keep getting cancelled.
I was just down in Dallas last month. I my god what you can buy down there.
My understanding is that the market is continually being fed new housing and stuff that is over ten years old is considered obsolete. So they just build more. It is one of the most affordable places to live in the country that has a real economy. Time will tell if it hits there at all but the only reason I could see the bubble burst affecting the region is if the psychology of the impending implosion affects them as well.
if the bubble hadn't popped, texas sure would look attractive
but think about it - during the biggest bubble ever, texas didn't see appreciation
amazing
just too much land
Dallas Texas is an anomaly. The economy there is not bad, and incomes are relatively strong. I actually believe that the bursting of the housing bubble could benefit this region considerably due to migration.
Medium home price to avg. income est. (multiple):
Dallas 2.3 -3.0
San Diego 8.5 – 9.0
As people start to realize that you can lose money buying overpriced property, it’ll likely lead to a move for less expensive real estate.
ANON: FYI
People fleeing pricey coastal states for South, West
12/22/2005 12:01 AM
In the USATODAY there was just such a situation being described
http://www.usatoday.com/news/nation/2005-12-22-census-data_x.htm
Kieth,
My Bro. in Law is cited in the above article. He tells me it is not that there is too much land per se but that the culture is pro growth. Look at the Fortune 500's based in the metroplex. A good portion are builders. Building is alot ofwhat DFWer's do for a living. Centex DR Horton etal.
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