There are new condos in every direction from my house, and even more under-construction condos. Along with that, I keep reading stories about condo oversupply throughout the region. Thus, I keep waiting hopefully for the inevitable crash and my opportunity to snap one up at bargain-basement prices and it keeps . . . not happening. I'm frustrated. Burst, bubble, burst!
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Where's My Condo?
16 May 2007 01:57 pm
Comments (23)
It's actually a sad by-product of Yglesias-style spelling in legislation to help the recovery of endangered condors.
Also it's not clear that housing in the district, as opposed to the region, will ever be in oversupply.
That's the key point. Your local condo market is not really part of any national market.
Why would you want to own a condo?
Condos are fine for a lot of people, every real estate market needs a certain mix of single-family houses, condos, and apartments.
Burst, bubble, burst!
I had similar daydreams while a company was holding a job offer open for me in Southern California. . .
Give it one more year of Bushonomics
And, the reason condo prices will crash is that so many are not owned by people who live in them, but rather by speculators--that, in addition to the overbuilding.
It's pretty well established that Northern Virginia has more of a boom-or-bust real estate cycle than Maryland, so Arlington or Alexandria are likely places to find discounted condos, rather than, say, Bethesda or Rockville. For the District, it's not so clear. My own feeling is that new multi-household residential was overdue in DC so, there's some oversupply at this point, but maybe less than one might think.
I bet Peter Beinart could afford to buy a condo with his book advance.
I'm waiting for the market to tank in Baltimore as well.
"2 bedroom condo, harbor view"
Ahhh, has a nice ring to it.
Ummm...Prices will come down, at least in real terms.
What will happen is that the backlog of REOs (Realty owned homes, i.e. unoccupied) will go up, and this will kick the pins out from under the market.
It won't go down as much as, for example, dotcom stocks, because people still derive value (shelter) from just living in them, but it's going to be a bloodbath.
In Massachusetts circa 1990, people were mailing their keys to banks without being requested.
Ah, yes. Timing the market always works.
honestpartisan, I agree that attempting to time the market is generally a bad thing.
That being said, recognizing that a market is unsustainably overpriced and walking away from it is a good thing.
The fundamentals of the housing market are out of wack, interest rates can only go up, and there is excess speculator inventory.
These are temporary things, but the market will have to come down to account for these things.
Re Yglesias
I thought that Mr. Yglesias was moving to Portland, Oregon.
Re Nicholas Beaudrot
There ain't no cheap houses in Falls Church!
> People simple refuse to sell at large losses ...
> they just choose to keep living in the same house.
Condos are typically built "on-spec" (speculation). Sooner or later the builder has to start lowering the price to get some money to pay off the loan. Otherwise his investor will lower the price when it forecloses on the property.
For single-family homes in _established_ neighborhoods you might be right, although you also have to consider those forced to sell due to job transfer, loss of job, retirement, etc.
Cranky
Some of those condos are actually built by people buying the units ahead of time. Sometimes these units go though more than one had before being ready for occupancy. If by the time of occupancy the market is not so hot, the owners may sit it out and rent - not try and sell. So many of the condos being built are already sold. Some new projects may be put on hold indefinitely.
I don't think you actually want a basement condo, Matt. Natural light is important!
Whether it's a smart or not, Matt, be comforted that lots of DC renters, myself included, are playing it the exact same way you are. C'mmmmmoooooonnnnn, burst!
As far as I can tell, Montgomery County has picked up an excess supply of condos, and they're being turned into apartment complexes. Given how sticky prices are, I'm guessing it'll be a while (three years?) before a lot of people can buy -- but renters ought to fare pretty well.
"Condos are typically built "on-spec" (speculation). "
That used to be generally the case, but it's no longer universal, especially after California allowed pre-sales in 2005. About 30% of my San Francisco building was pre-sold before completion in early 2006. The new building going up next door is already 80% sold.
Thus, I keep waiting hopefully for the inevitable crash and my opportunity to snap one up at bargain-basement prices and it keeps . . . not happening. I'm frustrated.
It's a little-known subset of the Zionist conspiracy, Matt.
Once you're no longer Pat Buchanan's favorite Jewish blogger, you'll recieve a packet in the mail containing the keys and the deed to your new condo, and you can mock and laugh at all the others waiting for the "bubble" to burst.
payday loan united cash
Comments closed May 30, 2007.
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Heads in the Sand
IIRC, the Housing Market Watchers(TM) point out that bubble's don't really burst in housing. People simple refuse to sell at large losses ... they just choose to keep living in the same house. And I think banks do the same thing (but I'm not sure). It's really more like slowly letting the air out of the balloon; it takes several years for real prices to decline.
Also it's not clear that housing in the district, as opposed to the region, will ever be in oversupply. I'm sure if you were willing to live in Falls Church or Tyson's Corner or some such, you could find something reasonably priced.
Just be thankful you're on the tail end, out here in Seattle, we only recently got the second derivative into negative territory. That is, housing prices are still going up, but they're not going up as fast as they used to be.
Posted by Nicholas Beaudrot | May 16, 2007 2:08 PM