Posted on 01/16/2007 12:59:04 PM PST by overtaxed_canadian
By VIKAS BAJAJ
WASHINGTON — David Franco’s illuminated model of a proposed 10-story condominium tower dominates a sales center that, in spite of the “Now Selling” banner still fluttering outside, is conspicuously closed for business.
“We could have waited it out and kept pushing and pushing,” Mr. Franco said about the decision to abandon plans to sell 180 luxury condominiums with floor-to-ceiling windows offering views of the Washington Monument and Capitol Hill. “But it would have taken significantly longer.”
After six weeks of failing to lure more than a couple of dozen buyers, Mr. Franco and his partner, Jeff Blum, joined the builders of nearly 6,000 condominium units in the Washington metropolitan area who have decided in the last three months to recast their projects as rental apartment buildings.
Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling.
In many cities, banks have significantly scaled back loans to condominium builders. Some have demanded that developers sell half or more of the units in a building before even beginning construction.
(Excerpt) Read more at nytimes.com ...
Good. I'll be looking to buy next year.
Even the rent in DC is too high.
And then it will go back up, like it always has.
It's a good thing I don't plan to sell any time soon. ;)
There you go! ;-)
Glad to hear you found a decent place to live after being forced out of your last place. It must give you some satisfaction to know that the jerks who treated you so badly are now suffering economically. Think how stressful it must be for them, hehehe.
They did treat me badly and treated almost everybody badly. They are sweating it out now - those units are moving slow, now over a year later. I confess, it does make me smile!
PLUS I have a wonderful, bigger new place for just $40 bucks more a month. ;-)
The slowdown started in the summer of 2005, and so far it's beeen very mild.
No. They just built them in the wrong place.
My sympathies to the developers who were shaken down by local government for contributions to develop low-income housing.
The pain seems to be extremely localized. Things have slowed a bit in the Chicago suburbs, but I've seen a few "SOLD" signs go up in the last few weeks after not much time on the market. Los Angeles is a mess. They just broke up a mortgage fraud ring that is going to result in roughly 5000 houses getting foreclosed on. It's getting to the point where subcontractors are getting stiffed by developers who run out of money, and the contractors end up placing a lien on the houses they've built but were not paid for.
So far the downturns have only been in the biggest bubble markets like San Diego, Pheonix, Las Vegas, Boston, Naples-FL and DC.
Median home price in Seattle shot up over 60K last year and have flat lined starting in Fall. Prices haven't come down yet and inventory continues to suck. I hoping for the market here to return to something resembling reality, but I'm not seeing it yet.
ping
I just saw a news flash on CNBC.
Centrex and KB homes just annouced they are having to write off $793 million in land.
Ouch.
The median home price in DC is outrageous. 1-2 bedroom condos are probably going for $500,000-$600,000 and for that you get to pay a monthly condo fee forever and live in one of the most violent and disfunctional cities in America.
The condo craze hit Tulsa in the early 80s. Many apartment complexes decided to join it. They gave the tenants the option of 'buy it or move out'. The 1 bdr apt I lived in rented for $275.00 per month. They wanted $47,000 when they converted it to condo. I moved out.
About 3 years later, the economy is Tulsa crashed. You couldn't even buy a job at McDonald's. The official unemployment rate was 8.5% and the unofficial unemployment rate (people who had no further UE benefits so were no longer in the system) was 13.5%. Many homes were abandoned as occupants had to move elsewhere to find jobs. The condo craze ended too.
The complex I moved out of had 116 total units. When they went back to being apartments-for-rent, they had only sold about 30 units. [Their brilliant idea cost them 3 years of tenant rents on about 75% of their units.]
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.