It sounds like there are WAY more condos built than there are people to pay for them. Read on:
Folks, no matter what the NAR or Harvard tell you, condo prices are going to drop nationwide.
Why? Because they were swooped up by investors these past few years to daytrade like pets.com. And these investors don't live in 'em, and if they rent 'em out the negative cash flow kills 'em. If they hang on to 'em they lose even more as their value plummets.
In cities like DC, Vegas, Miami, Phoenix and San Diego, I think you'll be looking at 50%+ declines from top to bottom. They'll come down in price to the point where monthly ownership costs equal monthly rental income. It's called The Fundamentals. Something the corrupt Nicholas Retsinas with Harvard doesn't understand, or doesn't want you to know.
The aftermath of condo fever
People camped out for the chance to buy a unit in Radius, a condominium development in Hollywood, Fla. The building's 285 units sold out in just over 10 hours -- half a year before construction was even set to start.
But that was in the summer of 2004, when the red-hot condo market was peaking and money could be made by investing in condos expected to quickly appreciate. Units were often on the market for resale as soon as they were completed. It's a much riskier proposition to flip a condo in some of today's cooling markets.
"You see some of these communities that investors purchased ... there are no lights on at night," said Bill Donges, chief executive officer of Lane Company, developer of Radius, which is scheduled for completion in the spring.
"The market is clearly oversupplied in many places," said David Seiders, chief economist for the National Association of Home Builders. "The key symptom of that has been on the price front. Prices have taken a hit."
Not wonderful news for those who have invested in condominium units with the intent to sell them quickly -- and are still holding them. According to NAR data, 31% of investment purchases made between 2002 and 2005 were condos.