Condos are alive and healthy March 19, 2007Posted by Jay Medina in News and Information.
“Reports of the death of the condominium market are greatly exaggerated,” said Bill Donges, CEO of the Lane Company, a builder of condos at points nationwide. “Despite the current slowdown in sales in some markets, condos won’t go away because people like them. “Today’s buyers want to live close to work, transportation, entertainment and retail outlets. A great location, a distinct product and a good price are critical to a condominium community’s success,” he said.
At the height of the housing peak in 2005, condos accounted for nearly half of the 350,000 or so multifamily construction starts produced annually. Two years earlier the condo share was about 20 percent. Some of the intense demand for condos over the past three years was driven by speculators in the market, and multifamily developers acknowledge it will take some time for the excess inventory of unsold units to burn off, especially in overbuilt markets on and near both coasts.
As condo construction retreats, the next wave of multifamily development activity is likely to be in rental apartments, according to a report from the National Association of Home Builders. That will be especially prevalent in markets where the rental supply is particularly tight. Over the past three years, a significant number of rental units have been converted into condo units. Construction and land cost are up, and that concerns all apartment developers, but especially those trying to build units affordable to working families.