How far/fast is the condo market falling? - Page 4 - PhillyBlog

herbacidal · #31 (**permalink**) 06-08-2006, 01:20 AM

But Bill, nothing you've just said disputes what Dwayne said in his post.

To build on what he said a little more, I do think condos increase and decrease in value more than other property.

To be more exact, in a quickly rising/hot market, people are willing to overlook the additional cost of monthly fees.

In anything less than that (falling, slowly rising, moderate, etc.) the monthly fees are more of a concern, as a significant portion of the monthly investment in their property that would not be there if the property did not have such a fee.

The increase in interest rates only increases that risk because what a person can afford for a house doesn't change, all other things staying constant.
Unless he/she got a raise, additional income from somewhere, etc.,
$2000 a month is what they could afford before, it's still what they can afford.
But now within a $2000 mortgage payment, a greater portion of that is interest. So the selling price of a house has to come down, or else it'll sit on the market.
But that all is a tangential discussion.

eldondre · #32 (**permalink**) 06-08-2006, 10:41 AM

Quote:

Originally Posted by billhouseman

The fact remains that when condo prices go over a certain (seemingly insane) level, people start to come to their sense and say, "i'm payin' THAT much for a GLORIFIED APARTMENT?"

Excluding markets like say Manhattan where the demand is extremely high and will never go away, when the winds start to change, condos are almost ALWAYS the first people to lose.

Look at Northern Liberties. They are building condos all over the place. Yet the place is still ridden with high crime rates, is not far from section 8 housing, has lots of deserted blocks and still lacks a supermarket. One day when the winds change, some people may just decide that they are overpaying or that "glorified, overpriced apartments" aren't worth it vs. buying a solid 3 floor rowhome.

actually, condo prices have historically been quite volatile even in nyc. and is northern liberties any closer to section 8 than most places in or around center city?

Tim K · #33 (**permalink**) 06-08-2006, 12:00 PM

Quote:

Originally Posted by sam

....The fact B.U. has some of the worst laid out units in the history of condo development...

Obviously you've never been into the Winston lofts on Arch street. Not bad if all you want to do is sleep and eat...those guys forgot to build any living space...but who wants open space in a loft anyway?