Condos May Flood Overloaded Areas

April 27, 2008

Thousands of condos are expected to further flood the market this year as units that were being built during the housing boom finally hit the market.

Reis Inc., a real estate research firm, says more than 4,000 new units are expected to be up for sale in Atlanta and Phoenix this year; developers in Miami and Fort Lauderdale, Fla., are about to release 10,000 more units; San Diego will add 2,500 units.

The deluge is bad news for developers and the lenders that provided the money. Lenders of all sizes have $42 billion tied up in condominiums, according to Foresight Analytics. Between the third and fourth quarters of 2007, delinquency on that debt rose to 10 percent from 5.9 percent.

Some buyers who have put down a deposit are expected to walk away as prices drop, experts say.

Source: The Wall Street Journal

Posted in Real Estate