March 27, 2006

The dot-condo crash is here...


Ah, we all saw this coming. People live in homes. Homes are tough to sell. But condos? Easy to get rid of.

The easy money of condo flipping is over. Many people didn't buy condos to live in - just to flip. And it's easier to sell the home you don't live in (2nd homes, investment condos) than the one you hang your hat in.

These units shot straight up to the moon. Now they are re-entering the atmosphere of reality, and buring up on re-entry.

We'll see some amazing $ and % drops over the next 24 - 36 months. Pennies on the dollar.

After several years of gung-ho development in south Florida, San Diego, Las Vegas and other major markets, the once-hot condo market is headed for a slump.

There hasn’t been a condo boom like this one, economists say, since the late 1980s when rising home prices and out-of-sight interest rates spurred developers to begin churning out a flood of condominiums. Many of these properties wound up back on the market, pushing prices down further.

Economists are concerned that this same pattern is repeating itself in markets such as Las Vegas, San Diego and Miami, where investors, rather than residents have bought many of the units.

The national median price for existing condos rang in at $228,200 in the fourth quarter of 2005 -- a healthy 12.3% increase from a year ago, according to the National Association of Realtors. But in some of the most robust markets, where prices had soared in the past few years, appreciation slowed to a trickle

Agents and economists say they expect to see further erosion this year, as the housing market continues to cool. "There is reason to be concerned about the condo market right now," said Susan Wachter, professor of real estate and finance at the University of Pennsylvania's Wharton School. "There is an all-time high of inventory right now and it is disproportional to condo markets," she said.

There hasn’t been a condo boom like this one, economists say, since the late 1980s when rising home prices and out-of-sight interest rates spurred developers to begin churning out a flood of condominiums. Many of these properties wound up back on the market, pushing prices down further.

Economists are concerned that this same pattern is repeating itself in markets such as Las Vegas, San Diego and Miami, where investors, rather than residents have bought many of the units.

23 comments:

Anonymous said...

AND dc

Anonymous said...

What is a post about the housing market doing on this blog? I thought HP was all about pop economics, bizarre conspiracy theories, and Chicano-baiting.

????????????????????

Anonymous said...

And dead TV B-list actors.

Anonymous said...

I'm sorry sir, but your race card has been declined.

It ain't easy being a race pimp.

chico_and_the_man said...

this blog has taken a very racist tone towards mexicans and those of middle eastern descent....

i do not think our host is a bigot, but he sure does not discourage bigotry.......

Anonymous said...

maybe because they turned so many cities in the southwest into slums.

Anonymous said...

Pressure building on alleged top end... http://newyork.craigslist.org/mnh/rfs/145888432.html

Anonymous said...

When will the slump hit all the crappy condo conversions in Scottsdale?!

We hear about San Diego, Miami, and Boston. Where's Phoenix's long awaited price slumps to wash out all the sleasy a holes from Cali?

brokersleaveyoubroke said...

Question: Which of the following items does not belong with the rest?

AIDS
Herpies
Syphilis
A condo in Miami

Ans: Syphilis, it's the only one you can get rid of.

Anonymous said...

Speculator jumping out of his hip Phoenix/SD/Miami condo unit

http://www.downside.com/bldgjump.gif

Osman said...

Pennies on the dollar! Lets see, according to you if I wait 24 to 36 months, maybe I can buy for (lets be conservative) 9 pennies on the dollar. That means I can pick up that $200,000 condo for... $18,000.

Wow, I could write a check for that and skip the mortgage entirely. You're right, what a deal! I can't wait!!!

p.s. Wake me when the dream's over. oh and Keith, your post repeats itself. Might want to fix that.

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