Condo REversions in the making? Excellent article from The HooK. We would not be the first market to see these reversions – Arizona, Florida (both stories via HBB), San Diego, Maryland. A kind reader emailed me a rumor about a local condo conversion possibly contemplating reversion; as soon as I have confirmation one way or the other, I will note it here. As with any investment, do your due diligence.
Related reading:
Condo buyers take developers to court over failed promises (WSJ)
Are there two Charlottesvilles?
Houses are Selling (and analysis from November removing condos from the equation)
Charlottesville Realtor and Marketing stats (showing the number of agents involved in condos/new construction)
The best description of the market I have read this week (referencing a condo project)
Condos and CharlAlbemarle Stats
Technorati Tags: albemarle, charlottesville, condo
So what happens if one of the “condo conversions” decides to “revert” back to apartments- what happens to the units sold as “condos?” Example: Complex has 364 units, sold 50- decides to “revert.”
This is reason number one (or two) that my rule is do not buy condos as an investment (buy only if you’re planning on living there), do not expect appreciation, hope that best case senario you are able to get what you paid for it when you are eventually ready to sell. Maybe that’s more than one rule, but I’ve always lumped them together.
That is a multi-faceted “one rule” 🙂 – but one that in this market (exempting the previous 6 years) buyers would do well to learn.
What happens when? … That is the question and the reason that I have advised several clients away from particular condo conversions. Think about it –
100 units for sale, condo fees are “expected to be about $100” – because they won’t know until all units are sold – and only 50 sell.
Do they
1) jack up the condo fees?
2) let the unsold units go into disrepair?
3) what does this do to resale when the high % of investors in the development will likely make financing difficult?
I would be curious to know what verbals promises were made to potential buyers and what % of transactions were done under Dual Agency (always suspicious, I know).
In short, we need to watch other markets and see what happens there … and then wait.
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