New Condos Are Everywhere And Their Prices Are Soaring. So, Who's Buying Them?

I can't for the life of me figure out how stupid someone would have to be to be buying a condo today - to live in, to rent, or to "invest". Anyone care to help HP figure this one out?

The question pops up all the time, just like the high-end condos that keep popping up near Metro stations across the Washington area: Who's buying all these expensive apartments?

Ballston resident Sonia Schmitt thinks she knows. A World Bank employee who has moved up to ever-bigger condos five times in the past nine years, Schmitt says it's a combination of buyer types.

She sees mid-thirties singles trading up from smaller condos and empty-nesters downsizing from bigger homes -- or even smallish homes that have appreciated so much that they can afford a $400,000-plus condo. More frequently, as prices jump ever higher, she sees buyer couples -- either married, cohabitating, same-sex or just acquaintances who are partnering simply to "get in the home-buying game." Most of them, she says, already live in the Washington area.

There is another big group that sometimes gets overlooked -- investors. According to a recent study by research firm Delta Associates, "investors represent 30 to 35 percent of the condo market" in the Washington area, chief executive Gregory H. Leisch said. That's higher than in all other condo markets in the nation except South Florida, Leisch said.
Investors represent about 25 percent of condo sales in San Francisco and New York and about 20 percent in Chicago, he said.

Leisch said two-thirds of Washington investors are in it for "the short term," to "flip" or assign the contract to another buyer before they sign, or to resell the unit soon after settlement, which is about 18 months after the original contract. Both maneuvers would let the original buyer get in on the huge price gains condos are showing, gains that can start when the building has been on the market for only a few weeks.