I know these towers well. The smaller units are tiny shoe box sized apartments with only 575 square feet. Under the business plan filed by the new owners of the building, a unit like that would sell for about $ 185,000. Today, many of these units are rented to students and retired elderly; they rent for about $ 500 a month. Why would anybody in his right mind buy a shoe box for $ 125,000 more than it is worth?
Also, these units overlook a park that is adjacent to Portland State University. The units are surrounded by the university and other apartments occupied by students and elderly tenants. During the school year, the park is filled with students doing what students do in Portland. Dancing to loud music, drinking beer and smoking herbs are sights that seen regularly. In the summer the park turns into a place where transients can be seen laying about. Portland attracts the homeless from all over the U.S. because the country provides lots of free services.
Do buyers want to pay over $ 300,000 for a bird's eye view of student and transient activities? Check the box: ______ Yes. _______ No. Why am I hearing the sound of giggles and laughing in the backgound?
The project was financed by major investment group based in New York City. I'm not going to mention the group's identity here for obvious reasons. But I would say, that if I owned that stock I would sell it sooner rather than later. Just my private opinion, people. I have every right to comment on a news worthy article. Not making fun of the company. But somebody may have sold a project into the housing bubble and made a ton of money.
The problem with real estate is that you can't short your house very easily.
(Rental costs) = (interest payment + maintenance costs - mortgage deduction - liquidity or risk premium) ...er, I think... If not then there should be an arbitrage oportunity and property will convert rather rapidly between rental and condo. Maybe someone will check my logic.
Rent control is funny because it just drives up the price of existing non-regulated property while instantly killing new rental development (just suggesting it kills rental supply as developers dive for cover).
I love liberals. No one can screw over poor people better than a good liberal. Its almost comical.