March 3rd, 2011 5:02 PM by BILL WILBANKS
Lemons to lemonade. I need to start out by confessing that even I have been hesitant to get a call on a condominium some days in the last couple years. Why you might ask? Well Florida has experienced one of the worst condo markets in the country for any number of reasons in that time.
If you can fog a mirror you already know the woes of the real estate bubble. Due to the tremendous sales price escalation seen in the market in the 05 through 07 time frame when buyers virtually stampeded to make that best offer before the price went up again, the market reached such high price levels so fast that entry level buyers and traditional investors in it to rent it, quickly found themselves priced out of the market on a typical single family residence and quickly moved to the lowest cost point which of course was the condo market. It wasn't long before speculation by "flippers" soon jockeyed prices up on this entry level market as well. So, even here in the Orlando area, unlike many coastal areas in South Florida and the panhandle, which had always been primary markets for this property type due to popularity with the typical retiree or vacation home owner and had similar issues, Central Florida generally had smaller, lower priced units, apartment conversions and low rise complexes overall. So the $40k to $60k unit got jacked up to $80k, $100k and more. That upward climb was really no different than a single family home with one major exception. Whatever happens in a condo complex rapidly effects the others since they are compared heavily to that complex on an appraisal...it's a fish bowl.
So the problems with declining values swept thru pretty fast. The high numbers of second home and let's be honest "investor/speculator" types that wanted to sell when they started falling started a fire sale mentality in many projects tanking values in a true downward spiral. Many owners walked away and complexes found themselves budget short on dues leaving the folks who didn't bail holding the bag for those costs too. Private mortgage insurance companies (PMI) suffered such high losses that they refused to write a policy on a new condo mortgage, which forced lenders to back down to 80% financing or lower and in many a case stop lending on condos at all in this market.
Much more to it of course, but...trouble to one person is opportunity to the next one. So I ask myself what information I had that I could pass on to a perspective buyer or realtor to get this moving again. Here are a few factual suggestions for you:
So whether you are a first or last time buyer, second home buyer or investor there are still many options open to today's condo shopper. These properties are available on a first come basis. And I ask you, when will we see better values in the market?