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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Travis_Bickle who wrote (54187)	8/2/2006 10:47:33 AM
From: mishedlo	Respond to of 116555

Condo sales, backlogs eroding developer investments NAR's June statistics leave no doubt about it: The residential slump is real. And condominium developers are feeling the worst pinch of all. Nationwide, condo and cooperative sales are down 14.6 percent from June 2005. Prices are falling too - down 2.1 percent from a year earlier, according to NAR. Reuters reports that in May, the supply of unsold units swelled to a record eight months. But as bad as the nationwide numbers are, there's even more gloom in some local areas. The Florida Association of Realtors reports that in the Melbourne area, condo sales have dropped to one-fifth of the same period last year, and prices have fallen a whopping 19 percent from a year ago! I've been talking to developers all over the country, and there's a common theme: An eight-month wait for buyers wasn't part of their business plan. While they wait for the units to sell, they're watching their profits erode as they incur months of costs for taxes, interest, utilities, maintenance and marketing. Meanwhile, their capital is tied up and they can't pursue new opportunities. Don't be surprised if you start to see a surge in auctions as the developers seek to free their capital and stop the bleeding. realblogging.com