Burned by condo-to-apartment conversion

[Jay_Gatsby]

Interesting article on those folks who bought condos that are now being turned into apartments.

http://www.msnbc.msn.com/id/13822980/

 

[brewer12345]

Sucks for the poor, poor speculators. :

Keep up the panic, guys. Gawd willing, I'll be able to buy that condo I've been hankering after somewhere in the southwest at a low, low price...

 

[Jay_Gatsby]

Sucks for the poor, poor speculators. :

Keep up the panic, guys. Gawd willing, I'll be able to buy that condo I've been hankering after somewhere in the southwest at a low, low price...

That's kinda the way I see it. I'd like to own a condo off a nice beach or in a desirable-weather area, but I'm not willing to pay $350k+ for one. Hopefully a combination of renters (who often bring down property values) and low rents will drive people to sell at fire sale prices....

 

[Rich_by_the_Bay]

This city (Tampa, as cited in the article) is going crazy with condos. It is said to be on the verge of becoming the next Atlanta, etc. The article cites suburban neighborhoods but the real test will be downtown and new, large waterfront developments. Trump, WCI, and Novares are all here and digging.

Too many units too fast and too expensive. But when it shakes down, there should be some good deals in perfect locations to pick up on the cheap, say in about 2009-2011, I'm guessing. Just in time for DW and me to downsize .

BTW, rumor has it that many of the buyers were investors looking to flip.

 

[farmerEd]

"It's a tough business today," he said. "I don't think anybody predicted this."

Really? Wow.

 

[Martha]

We were investors in Arizona apartments that converted to condos. Our investment has been paid back in full and we are continuing to get distributions monthly from condo sales. The sales are far enough along that the units should sell out fully, but you never know. We did have some initial worries as to whether our buildings were early enough to the conversion game to pay off. As we were passive investors, it wasn't our call whether to do the conversion or not.

It would be yucky to be left owning a few apartments.

 

[haha]

I had thought that pretty much any building in the Seattle area that could be converted had been, but recently my younger son and DIL were offered a move-out bonus if they would relinquish their lease and get out in 2 weeks. So it sounds like their management is trying to get it while they think the getting is good.

This is a very marginal building to convert. Excellent location, but small and old building and units.

Ha

 

[lazygood4nothinbum]

within the last two years broward county (fort laud area) lost 25% of its rental stock. reversion would not have been hard to predict.

doc, one day you'll see a megatropolis stretching tampa to orlando.

 

[slepyhed]

The conversions led to a reduction of 18,000 rental units in 2005 and an occupancy rate of 98 percent, according to the commercial real estate firm Cushman & Wakefield.

The result is predictable. Apartment rents have soared dramatically, rising $200 to $300 a month for some renters this year. Because many of these investors will be renting out their units, Markstein said, the inventory will swell again, and competition will force rental rates down.

OK, I'm no real estate expert, but that's never stopped me from having an off-the-wall opinion before:

Complexes are being converted into condos. The condos are bought by "investors", and they sit empty while the "investors" try to flip the condo. The net effect is that thousands of apartments were emptied out and the renters were left looking for a place to live in a "tight" rental market. Meanwhile, more condos/apartments were built by other speculators, so there's a glut of low-quality housing inventory that just hasn't hit the rental market yet. In the long run, there's going to be more units than people to live in them. The flippers are the ones holding empty condos that they can't/won't rent out.

I don't know, but it seems like if I were one of these small-time single-unit buying investors, I am a goldfish swimming amongst great whites. Guess who gets eaten alive?

 

[haha]

Every glut becomes a shortage, every shortage becomes a glut. ( With the possible exception or oil and gas.)

IMO, it's not that small speculators can't win, but that dumb speculators can't win, at least not over time.

Ha

 

[spideyrdpd]

Hey Lazy
They were talking about building that bullet train. Although I havent heard anything lately. I know its starts in Orlando and the plan was to go northwest ?

They were walking around the neighborhood with signs for the local condo conversion and have now have buyers specials. No closing costs etc.
They have had articles in the paper about some of the condo conversions being older buildings were the condo fees would have to be raised to bring the buildings into better quality.

Rob