pageok
pageok
pageok
Condoflip.com, R.I.P.:

Condoflip.com, featured on these "pages" in June 2005 as a sign of bubbledom, is no more. The website has this explanation:

How Did The Market Change in 2004 and Beyond? We saw a dramatic shift in how preconstruction condos were bought and sold. The condo boom was driven by overly-ambitious speculators, [editor: ya think?] many of whom had been successful in flipping condos in the past. As condo inventories grew and prices rose many speculators realized that further purchasing was increasingly risky. So, buyers just stopped buying. What Kinds of Results Did Condo Flip See? We saw thousands of sellers, and very few buyers. It didn't make sense for us to maintain a marketplace where there were few buyers.

GC Defense (mail):
I'm not familiar with the Miami area and their speculation bubble but as a consultant in the construction defect portion of the industry, in my opinion, California has seen a dramatic decrease in condo construction due to CD litigation. Litigation which more often than not has no real basis aside from homeowners who are promised this incredible piece of a monetary pie.

In recent years builders have shied away for a variety of reasons, including the inability to obtain insurance. For us on the West Coast this means a notable decrease of in-fill projects that would have provided some relief for the average joe who simply just wanted a small place of his own.
2.14.2007 8:44pm
Jim Rhoads (mail):
Respectfully, GCD, I must disagree. I have represented condominium associations and developers in CD litigation since 1974. Last year, I was an expert witness in a case in the Dallas metropolitan area in which, among other things, the firestopping in a five story luxury condominium was either absent or seriously deficient in most units. Of course, these problems were not readily apparent to any of the unit owners when they purchased.

The problems were discovered when one owner had plumbing problems and some of the walls were opened.

The Developer/Seller settled for nearly $10MM, after evidence was developed that these problems were covered up during construction, while the Developer's representatives were in control of the association.

This type of problem has been, unfortunately, not unusual in condominium construction.
2.14.2007 9:26pm
DJR:
I note that this week the Washington Post's business section talked about the winners and losers in economic predictions for 2006. The winning prediction was that the economy would do just fine despite a housing slowdown.
2.15.2007 9:14am
Adeez (mail):
What happens when foreclosures begin to skyrocket due to, for example, the re-setting of ARMs???
2.15.2007 2:15pm
Jim Rhoads (mail):
Adeez:

The same thing that happened in 1974-1975, 1980-1981, 1986-1988, 1990-1992. This stuff runs in cycles, and history, unfortunately, repeats itself.

It seems that some people have to learn these lessons anew. Or new people have to learn the same lessons.
2.15.2007 6:09pm
Alan K. Henderson (mail) (www):
Can't speak for the market, but I can say that I never ever wanted a condo. To me, buying a home means that I want to live there for a long, long time. Condos are just apartments that you buy instead of rent, and apartments are where you live temporarily unti you have the money for a house and can commit to living in a certain area. And you have more freedom to make physical improvements to a home than to a condo.
2.16.2007 12:03am
T.:
Jim Rhoads -

I was 13 in 1992. What happened?
2.16.2007 2:39pm
Jim Rhoads (mail):
T:

The Savings and Loan "crisis". Briefly, the S&L's before then were, on the credit side, primarily engaged in making purchase money mortgage loans for single family homes.

After the tax changes in 1986, which effectively eliminated private investments in real estate tax shelter project syndicates, many of the S&L's looked to the vacuum created in that market as an opportunity, and began making loans to developers of large multi-family projects like condominiums. They created a money seeking bubble, and condominium projects again sprouted up all over the country. Before long, their inexperience in funding these kind of projects caught up with them, and they began to fail one after the other.

The bubble burst again. Bankruptcies and much ligtigation ensued.
2.16.2007 6:33pm