Condos - Good for the long term
To be sure, most agents say they believe condos are a good bet in the long run, if they are well located. "I'm not a big believer in the bubble bursting,” Realtor Davis said. "There's not much land here (in Southern California) and people still want to live here."
If developers pull back on new construction, and the economy and interest rates remain on course, the supply issue could correct itself in many markets in about a year, said the Wharton School's Wachter.
Longer term, Carliner thinks the percentage of baby boomers moving into retirement could also bode well for condos. Eighty percent of all condos in 2004 were owned by people 55 and up.
Ryan Higgins, for his part, was undeterred by declining condo prices. The 29-year-old broker and mortgage lender from Carlsbad, Calif., recently decided to buy a $585,000 three-bedroom condo in the chic La Costa area, despite seeing prices dip on many new projects. "Real estate is not a good short-term investment," he said. "Anyone could have made money in real estate in the last few years." Now, he said, you have to be patient, "buy in the right market and sustain some turbulence."
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