Tweet
Looks like the implosion is rippling inward to the core rather quickly (at least insofar as multi-family accomodation)...
From the NY Times:
A Bank Bet on Condos, but Buyers Want Out
By CHRISTINE HAUGHNEY
Published: October 9, 2007
Javier Miglin may walk away from an $80,000 down payment on a condominium with water views in Miami. Randal Mills may give up a $130,000 deposit on a 15th floor condo on the Strip in Las Vegas. And in San Diego, Jeanette Graham would just like to meet the neighbors.
The three seemingly unrelated predicaments have a common thread that leads to Chicago, and Corus Bankshares, which financed the construction of each condominium development involved.
Whether buyers like Mr. Miglin and Mr. Mills close on their condos will be a crucial indicator for Corus. Many condo projects that started during the real estate boom are just being completed, and developers must begin repaying construction loans taken out before the market turned sour. If buyers do not close, and developers struggle, lenders like Corus may be left holding the bag.
“We’re at the riskiest point of the condo lending cycle as these projects are being completed,” Jefferson L. Harralson, a bank analyst at Keefe, Bruyette & Woods, said. “In the coming weeks and months, we’re going to find out what the demand for these condos really is.”...
...Among the projects is the Icon, where Ms. Graham bought a one-bedroom apartment last year for $374,000. At the time, she said that she was able to negotiate a $9,000 reduction in homeowner association fees, $5,000 toward closing costs and a washer and dryer. She said that her building sold 80 percent of its apartments.
But she said that the building is now offering even better incentives. Residents who refer buyers get a $5,000 finder’s fee and an extra $5,000 for the buyer.
Still, she questions whether there will be any takers, especially since her building feels empty. “I can go a whole week without seeing a neighbor,” Ms. Graham said.
Link to full article:
http://www.nytimes.com/2007/10/09/bu...ewanted=1&_r=1
From the NY Times:
A Bank Bet on Condos, but Buyers Want Out
By CHRISTINE HAUGHNEY
Published: October 9, 2007
The three seemingly unrelated predicaments have a common thread that leads to Chicago, and Corus Bankshares, which financed the construction of each condominium development involved.
Whether buyers like Mr. Miglin and Mr. Mills close on their condos will be a crucial indicator for Corus. Many condo projects that started during the real estate boom are just being completed, and developers must begin repaying construction loans taken out before the market turned sour. If buyers do not close, and developers struggle, lenders like Corus may be left holding the bag.
“We’re at the riskiest point of the condo lending cycle as these projects are being completed,” Jefferson L. Harralson, a bank analyst at Keefe, Bruyette & Woods, said. “In the coming weeks and months, we’re going to find out what the demand for these condos really is.”...
...Among the projects is the Icon, where Ms. Graham bought a one-bedroom apartment last year for $374,000. At the time, she said that she was able to negotiate a $9,000 reduction in homeowner association fees, $5,000 toward closing costs and a washer and dryer. She said that her building sold 80 percent of its apartments.
But she said that the building is now offering even better incentives. Residents who refer buyers get a $5,000 finder’s fee and an extra $5,000 for the buyer.
Still, she questions whether there will be any takers, especially since her building feels empty. “I can go a whole week without seeing a neighbor,” Ms. Graham said.
Link to full article:
http://www.nytimes.com/2007/10/09/bu...ewanted=1&_r=1
Comment