Real Estate Incentive Advice
The real estate boom of the past years created a nationwide community of eager developers desperate to get on the bull market wagon, particularly in the condo conversion sector. Luxurious high-rise developments were popping up in every major city with buyers camping out to purchase a unit. A bizarre situation of middle-aged, upper-class professionals with enough expendable income to invest in high-cost property camping outside of a development like they were teenagers waiting for tickets to a Kiss concert. But that was before. In the past year, real estate prices have declined to such a level that these aforementioned buyers are now canceling their investment in these previously coveted properties because of a negative outlook for short term investment return. Yaerd offers properties with exclusive incentives. Learn more.
And other potential buyers are now displaying a noticeable lack of interest in condo investment in general. Developments are being postponed and terminated and finished projects are sitting on the market for extended periods of time. So many developments had been planned with the intention of being sold to short-term investors or “flippers” for the high market value that was standard at the time, but as prices continue to descend flipping is looking far more dubious. According to an inventory conducted by the National Association of Realtors, today’s condo market offers enough properties to satisfy all housing needs for the next 8.6 months and condo prices are down about 2 ½ percent since this time last year. Supply is fare more abundant than demand and developers are bordering on desperation. Today’s real estate industry shows all the symptoms of a buyer’s market.
As home sellers continue to lower their asking prices, condo developers have taken a more complex strategy of offering incentives to buyers. In San Diego, one of the original cities that led the condo boom, developers are having so much trouble getting rid of units in luxurious high-rises that they are offering free plasma TVs, $5,000 home renovation gift certificates (which appears very odd to offer in a brand new development), $35,000 discounts, and zero-money-down programs. San Diego condo developers are also implementing flamboyant advertising campaigns that include neon sandwich boards and arrow-twirling women pointing to the forlorn development. Even in Boston, a city that still boasts a strong condo market, developers are offering $10,000 worth of hardwood floors or to waive a year’s worth of condo fees. Yaerd.org exclusive incentive properties.
But news for the condo industry is not all bad. Boston sold more condos this year than in this time in 2005, Chicago has a healthy market, and Texas condo popularity is augmenting significantly. And even in the cooling markets there still exists the possibility to profit on a condo investment. Long-term real estate investment is still a viable option for potential buyers and those who had already purchased a condo when the market was hot. Several of these property owners are now renting out their condo units to tenants who prefer renting or those who are waiting until the market picks up again to purchase. And, of course, many other buyers are taking advantage of the benefits that developer desperation affords them, leaping on the incentives in the already luxurious condos before prices rise again.