Condos, Condos, Condos... not too long ago, FHA (where most people these days are getting their loans) said that if more than 15% of a condo development is delinquent on condo fees FHA will not lend any money for mortgages in that development.
In today's economy, where people are losing work and investments are losing value, there are a lot of people using their money for things other than condo fees (like food, clothing, etc). That 15% delinquency is getting worse in lots of condo developments.
Then Fannie Mae and Freddie Mac made the same rule for their CONVENTIONAL loans. Delinquency rate over 15%... NO LOANS.
What's that mean? It means condos won't get sold because buyers can’t get a mortgage to buy them. Period.
Sellers still need to sell. So they lower the prices to fire sale pricing to attract cash buyers. That’s why prices are SOOOOO low for condos. Condos that were selling for $200k a few years ago and listed for <$100k now and still not selling (no mortgages!). My Doctor told me today that units in his development that sold for $300k 2 years ago (for 3,000sqft units) are listed for <$50k now. Sellers are trying to attract cash buyers. But… cash buyers won't buy condos because they cant sell them.
That's the problem. The opportunity is: When the condo problem is fixed and people can buy condos again, prices will go back up.
Prices are low now because there is no (buyer) demand. Once the problem is fixed and the demand is restored, prices will go up.
If you can wait for the condo problem to be fixed (who knows how or when it’s going to be fixed) you can get a condo at FIRE SALE prices now. What if you bought one at today's 40-50cents on the dollar and rented it until the problem is fixed and then sold it when prices were zooming back up? Good idea? who knows, but an idea just the same.
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