My biggest concern for condo owners who have ANY intention of selling in the next two years is that they will be undercut in price by the condo builders and converters. These condo owners will be competing on a playing field where they can’t win.
I’m keeping track of some 4 unit condo projects in my area. I figure they will cost the builder about $300K per unit in build/carry costs.
The first of these projects came on the market at $549K and has now dropped to $449K per unit (w/o selling any units as far as I can tell).
Let’s say someone buys one of these units for $449K and then decides to sell.
Who can drop prices more easily? The builder who will make a profit on anything over $300K or the owner who owes the bank $449K?
Here’s my guess: in a declining market the builder is going to price his units below whatever price the owner is asking which means the owner WON’T BE ABLE TO SELL their unit until the builder has sold ALL of his units.
