Boy, those developers really made people feel lucky to snag a unit, with their waiting lists, the price increases, the pre-construction parties.
Must be a pretty tough pitch though these days.
The Dot-Condo collapse is here. And it gets ugly when everyone rushes to the exits at the exact same time.
Farewell, Condo Cash-Outs
When developers in Arlington, Va., threw a party 18 months ago to showcase plans for Clarendon 1021, a condominium development that had not yet been built, 3,600 prospective buyers stood in line just for the chance to book reservations to bid on the apartments.
Now, less than a year after the building opened, speculators in this and other buildings are putting dozens of units on the market at the same time, causing asking prices and profits to slip.
Of 23 investors who sold since Clarendon 1021 opened last summer, the three most recent sellers actually lost money, after paying all fees, and average profits in the building have declined since August, said Frank Borges LLosa, owner of FranklyRealty.com.
The Great Condo Gold Rush is fading from memory and the Great Sell-Off has begun. "Money Down! Motivated Seller, Want More? Just Ask!" screamed an investor's online advertisement last week for a one-bedroom apartment in Clarendon 1021 that had never been lived in.
This is not the first time that condo markets have been influenced by investors. In the late 1980's, developers converted thousands of condo units in the Northeast and many of them were bought by speculators, said Karl E. Case, an economist at Wellesley College. Many of those investors, he said, ended up losing money when they sold in the early 1990's. "It was ugly," he said.
February 20, 2006
Stand in line with 3,600 other dolts. "Win" lottery to buy a condo. Lose your shirt. Welcome to the new reality
Posted by blogger at 2/20/2006