One of the articles is easily accessed on Sign on San Diego (link and snip below). No new information here, but its interesting to see information regarding the condo glut finally hitting the mainsteam’s attention:
Oversupply of units hurts prices, leaves investors in limbo
By Lori Weisberg and Mike Freeman
UNION-TRIBUNE STAFF WRITERS
September 24, 2006
The conversion slowdown comes at a time when sales in the overall real estate market are also slumping and once-sizzling price gains have vanished.
Making matters worse for converters has been the record number of new condos being built in downtown San Diego and elsewhere in the county, also vying for buyers. In June, there were 5,800 unsold condos in new projects, said Michael Carney, a real estate economist with the Real Estate Research Council at California State Polytechnic University Pomona.
Financial picture gloomy for those holding properties
By Mike Freeman
STAFF WRITER
September 24, 2006
When The Heights in Carmel Valley converted from apartments to condominiums last year, the owners renovated 150 of the 225 units, thinking they’d sell fast.
It hasn’t turned out that way. The Heights has sold just 80 condos, according to county deed records filed through August. Only 18 of those sold in 2006. At that pace, it could take three more years for The Heights to sell completely.
Amazing how the condo converters who are real-estate professionals could be in denial and still hoping for an upturn in the market in the next couple of years.
I don’t think that the outlook for those unfinished conversion projects is very bright.
A lot of people made a lot of money during the boom. I think that just as many have spent all their gains of will soon give it all back.
Yep, I think San Diego is going to look very untidy during the upcoming recession/depression: unfinished building projects, abandoned and poorly maintained ‘investor’ (why the Union-Buffoon insists on using the term ‘investor’ instead of ‘speculator’ escapes me) condos and homes, homes on sale forever given the fall in income and exodus to sane South and Midwest.
The good thing about La Jolla is that ‘For Sale’ signs are prohibited. We’re neat and tidy about our financial distress!
“Kerr said banks are supportive. ‘They know they’re better off hanging in there than doing a fire sale,’ he said. ‘In our conversations with lenders, we’ve told them, ‘We don’t want to toss you the keys, and we don’t think you want us to toss you the keys, because who will (manage the project) better than we will?’ And they know that.’”
“‘Do I think (by renting the units) you can cover 100 percent of your debt service? Probably not,’ Easley said. ‘”But that basically buys you time and allows you to wait for the market.’”
What could possible change the market at this point? The soonest the Feds will start lowering rates is in Spring 2007. We know the population of San Diego is declining. Most importantly, the greed frenzy and the fear of being priced out are gone.
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