Has the condo market been overbuilt, or overpriced?
Unless you live underneath a rock, it can be no surprise that the condominium market in particular has drawn the short end of the stick in the recent housing downturn. From high rise to loft/Brownstone styled condos, the market seems unyielding harsh to the presence of a growing number of unsold condo units. Be it southern Florida, Boston, or Las Vegas, condominiums are indeed the stepchild of the housing market. Saddled with low owner-occupancy ratios, uncollected condo fees, or a higher number of foreclosures nationally, condos are getting a bad rap. Developers rabid with the desire of what was once viewed as "easy money", began planting condo buildings throughout the US in already bloated markets, and in "B" and "C" locations.
The allure of condo living can be defined as one of less responsibility. Many empty-nesters looking to lighten their load in life, as well as many first time buyers seeking a less burdensome way of life- one that requires no lawn mowers, a garage full of tools, or perhaps a comprehensive knowledge of roof repairs.
It can be no secret that a number of buildings around the country are mulling over ideas to combat sluggish sales. And it is been adequately demonstrated that particular resale units in new developments sell quite quickly when priced below original sale prices- from short sales, distressed sellers, and corporate owned relocation properties. Today's mantra isn't Location, Location, Location, rather Value, Value, Value.
With national housing inventory hovering around the nine month mark, the silver bullet for the condo market isn't more buyers, it is perhaps more realistic asking prices. Philadelphia recently saw the Murano Condominiums auction forty one units in an effort to shed excessive inventory, and the strategy worked very well. All units sold on auction day. This example of an "acute market correction" will no doubt be duplicated in some fashion or another- be it another auction, an installment sale sell-off, or perhaps an outright fire-sale in which prices are drastically slashed to move an excess of inventory in any particular non-performing Philadelphia condo building.
The point is that in today's marketplace, some type of immediate corrective action is going to need to occur in order to move some of the dead weight we have in the condo market segment. Carrying unsold inventory is becoming less of an option for developers, as banks press for the return of their investments into such pieces. As demonstrated in numerous cases, buyers are waiting for such action in order to jump into the marketplace. There appears to be no shortage of ready, willing, and able buyers- IF those buyers perceive values to be intact, and at the forefront of any given available condo unit.
During the late 1980s, Mark fell in love with the Philadelphia real estate market. The first condo he
bought for himself was in Old City. Working with bank foreclosures on multi-unit buildings, Mark began
to carve his niche as a condominium specialist. Since that time, Mark has progressed into helping
developers turn apartment buildings into condominium buildings.
Having been inside countless condos in the Center City real estate area, Mark is intimately familiar with the available properties. Mark prides himself and impresses others of his vast knowledge of what's trendy and knows which finishes buyers look for when selecting a home.... so much so that he's been seen on HGTV's What You Get For The Money, CN-8's Money Matters and was the 2005 winner of Philadelphia Magazine's Kitchen of the Year contest.
Center City Philadelphia Condos
The Experts In Philadelphia Real Estate -- 215.521.1523