Few interesting tidbits from bubble market DC
* Already oversupplied condo market about to have 50,000 more units dumped on market in the next 36 months
* Developers rushing to completion because they have to financially
* 500% more condo units for sale today than 12 months ago (wow!)
* Investors pulling out, canceling units and deposits for fear they won't be able to break even
I'm reminded of the "Trouble with Tribbles" Star Trek episode here - condos multiplying like Tribbles and nobody can stop 'em. (No, not ST geek, but a great episode for sure). Here's highlights:
That's a big change from when there were only a handful of properties available and buyers had to snap them up with little time for reflection, she said
About 51,400 units were being planned or marketed for delivery within the next three years, Delta Associates found, up from 39,000 three months earlier. It appears some builders are proceeding with projects they have spent years developing, even as the supply of new units rises, in hopes their projects will be more successful than the competition
Leisch said many condo developers are proceeding because they must financially. "They paid so much for the land, and they are so far down the development timetable, they are so far committed, that, practically speaking, they can't stop," he said.
"I think without question the condo market will continue to soften," said Kenneth Wenhold, Virginia and Maryland director for MetroStudy, a Houston-based real estate research firm that specializes in the new-home market. Wenhold said there are five times as many condo units for sale as there were a year ago.
When the condo market was at its peak a year or so ago, investors flocked to buy units before construction with the intention of flipping them for a profit. Wenhold said he has heard that some of those investors are deciding not to go through with their purchases, giving up their down payments, to avoid being left holding units they cannot sell.
"Contracts are falling through because people are walking away from the closing table,"
January 09, 2006
Posted by blogger at 1/09/2006