The National Association of Realtors just released anti-bubble reports for many housing markets. Notice how the wording is each report pretty much the same and just a few figures and names were changed.
One reader wants to discuss the NAR's anti-bubble campaign. "This email is in response to the many inquiries that NAR Research has received from state/local associations since I delivered my presentation at the Leadership Summit in Chicago last week. As promised, NAR Research will be distributing anti-bubble reports for many of the metros across the nation to all state and local associations."
Wednesday, November 02, 2005
NAR Releases Local Anti-Bubble Research
On October 29th, Ben Jones posted this on The Housing Bubble Blog:
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Atlanta Midtown market is cooling. Just opened Spire, a 28-story building with 388 condos has 104 units on the market.
ReplyDeleteThe builder, Novare, sold out Spire quickly, after enjoying great success in 2002 with the 498-unit Metropolis across the street, but Spire's 96 resellers (flippers?) and 6 owners hoping to rent out their units are in deep trouble.
Prices range from $167k to $768k for 1 & 2bedroom units.
http://ianmarshall.mlsb.com/mls/results_fields.cfm?ClientID=2671&SearchType=Address&HOUSE_NUMB=860&STREET_NAM=peachtree&CITY_NAME=%276198%27
New stuff sells in Atlanta because Atlantans are willing to pay a premium for the latest & greatest--but as Metropolis resellers are finding out--that premium doesn't last long.
Atlanta's condo market is probably going to have a soft landing. New buildings are probably going to do well--just not as well as before. But existing condo owners inside the Perimeter can forget about making a fast buck. In fact, Fulton County property records show that many condo dwellers had to sell for 10 to 15 percent less than what they paid if they purchased at inflated prices during the 1999-2001 period.
The problem with many condo buyers is that their purchasing decision is based on what they can afford for a monthly payment instead of a realistic resale value 2 to 4 years later. Many find that prices declined two years later instead of rising.
Not to speak of the rest of ATL--just the Midtown area has no less than 1,200 units coming on line and 4,200 in the planning stages.
It's going to be an expensive summer for condo resellers who hold out for 95% of asking price. If that magical offer comes, it will have been at a very high holding cost--but most resellers have this myopic view that its better to lose $10k in monthly payments than to lower their price by $5k to unload their property.
This is not a luxury that many can afford thanks to option-ARMS and cash-strapped speculators.