Condo ownership presents some special hazards during an economic downturn. Even you personally are solvent, your fellow condo owners might not be. Today’s New York Times reports:
Collateral Foreclosure Damage for Condo Owners
When people buy condos, they expect their monthly fees will cover many of the responsibilities that they would otherwise have as owners of single-family homes, like cutting the grass and paying the water bills. Now many find themselves nagging each other in the hallways to pay their assessments and adding special fees while haggling over chores…
“…your fate is tied to 50 or 100 other people who may stop making their condo payments,” [says Sam Chandan, chief economist at the real estate research firm Reis]…
Sales of existing condo units were down 26 percent in March from a year earlier, compared with an 18 percent decline for single-family homes, according to the National Association of Realtors.
…Bargain hunters say they are reluctant to buy into a building even when the upfront cost seems low because they might have to pay unexpected fees as distressed neighbors default on their mortgages or just stop paying the association fees that cover everything from taxes to pool maintenance to air-conditioning repair…
The shabby condition of some condos means potential buyers insist on especially steep discounts on foreclosed units…
Buildings with few units can suffer even if it just one owner falls into trouble…
[Condo owner Mark Mills] resents neighbors who have rented units they cannot sell to 20-somethings, who leave beer bottles in the lobby and hold late-night parties…
See also:
Boston Globe: “Housing prices keep falling as slump enters its third year” (4/29/08)
Prices
for home sales that closed in March fell nearly 11 percent from March
2007, the largest decline since 1990, and the number of sales reported
during that period was down more dramatically – 32 percent – according
to the Boston real estate data firm, Warren Group…
While condominium prices had been holding up better than single-family prices, that market is slow, too.
Sales plunged 35.6 percent in March from a year ago, according to Warren Group.
Condo developers are increasingly turning to auctions to unload units, both in Boston and the suburbs…
Woes in Condo Market Build As New Supply Floods Cities: Wall Street Journal (3/22/08)
The condominium market is about to get worse as many cities brace for a
flood of new supply this year — the result of construction started at
the height of the housing boom…
The deluge means bad news for developers and potentially lower prices…
The deteriorating economy isn’t helping. “When the world goes to hell
in a handbasket, the last thing anyone wants to buy is a condo,” says
Cathy Schlegel, a mortgage-loan broker in Fort Worth, Texas…
Gazette: “North King Street condominium project stalls” (1/26/08)
Republican: Florence condo units sold at half-price (12/4/07)
AP: “Empty Houses Home to Crime As Loans Fail” (11/13/07)
As defaults surge on mortgages made to borrowers with spotty credit and
adjustable-rate loans, more people are noticing that their neighbors
are caught up in the meltdown…
“They’ve seen a lot of
prostitution in the area, vagrants wandering in and out of the empty
houses and drug activity,” said Officer Dakarta Richardson of the
Atlanta Police Department. “Some people that I talked to are afraid to
walk out of their homes at night.”
[A recent study by Dan
Immergluck of Georgia Institute of Technology in Atlanta and Geoff
Smith of Woodstock Institute in Chicago] showed that when the
foreclosure rate increases one percentage point, neighborhood violent
crime rises 2.33 percent…
The homeowners sometimes have no
options but to accept any renters they can get, said Norm Schriever, a
local real estate and loan agent [in California].
“You get some
bad renters in there and the weeds start growing and a few windows are
broken and it starts descending into a feeling of chaos,” he said…
EPA: Do Stormwater Retention Ponds Contribute to Mosquito Problems? [emphasis added]
Mosquito proliferation in stormwater ponds is a concern,
especially when so many wet and dry ponds are in place and continue to
be installed across the country. Many ponds are not properly
maintained, particularly in cases where they are installed in
subdivisions and other developments where the entity responsible for
long-term maintenance is not clearly defined once the construction is
complete…