Condo Prices Drop | Buyer's Cue to Buy
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When
condo prices fall, it pains the Seller ... however for buyers it should create
a feeding frenzy.
In
Orlando, Condo prices have fallen more in the past year than in any other metro
area in the state and, most likely, the country, according to state and
national Realtor reports.
The median price for an existing unit in Orlando was $50,600 in the third quarter
-- a 56 percent drop from the same time a year ago, when the midpoint sales
price was $114,000. Statewide, condo prices fell 34 percent during that time.
In the US, the only city that comes even close to Orlando's dropping prices is
Las Vegas, which had a 46 percent decline in median prices for condominiums
during that same period.
Orlando's distinction for falling condominium prices comes as no surprise
myself. As we paid $134,000 in 2005 for a two-bedroom unit in the
Greater Orlando Area, today this unit is barely worth $30,000.
There is no "bottom" yet, however rental prices have either stayed
the same or they've even risen in some places. But the condo prices
continue to slip, mostly due to lack of FHA eligibility financing.
Most buyers have cash. Due to lack of Conventional lenders lending and
the government will not take a risk on the plummeting properties that are often
managed by associations on the brink of financial disaster, with many owners
not paying maintenance fees.
What's driving the fall?
It's
not as much an oversupply of downtown high-rises built during the peak of the
market as it is Orlando's fast pace of conversions from apartments to
condominiums from 2004 until early 2007, known as Condo-Conversions. In
2005, the city led the nation in the number of conversions, with many of the
complexes in outlying areas.
There is light at the end of the tunnel because in some newer projects, units
are converting back into apartments, as in the case at 55 West in downtown
Orlando. In November, for instance, Smith Equities Real Estate Investment
Advisors of Orlando sold 640 units at Park Central in South Orlando to a
Canadian buyer for $58,750 per condo.
"The key to closing this transaction was getting both the buyer and seller
comfortable with the financial condition of both the rental operations and the
condominium associations' economic stability," said Gerald Smith, senior
investment adviser for the firm.
Orlando should not continue to hang onto the biggest-price-fall distinction
much longer, because of the halt of development were other cities, such as
Miami, are getting ready to have new condo projects come online, and that in
theory will further extend their recovery for the sector.
This
means that for buyers - now is the time to pick up a condo at ROCK BOTTOM
PRICES
Lee Rosa
is a Realtor living and working in Downtown
Orlando, Florida and represents buyers and sellers there. Read more about
selling your home in Central Florida.
Call or email to set up a viewing of hot deals, or any other home in Central
Florida.