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
Posted by blogger at 12/31/2005