by M. Anthony Carr
The national condo market has a problem -- too much inventory. That from the National Association of Home Builder’s top economist, David Seiders. A report released a few weeks ago, shows that builder confidence eroded in third quarter of 2007 in the Multifamily Condo Market Index. Current conditions in the condo market have hit its lowest level since the index was created five years ago, according to NAHB.
Seiders says, "While condos in a number of metropolitan areas are continuing to sell well, the national condo market still has a problem of too much inventory." As a result, builders are pulling back on new supply to return the market to a more equitable situation for builders.
Meanwhile, the trade association reported that "traffic from prospective condo buyers remained steady with 2006 pace, which provided builders enough evidence to increase their expectations of better sales as the market moves forward."
One of the variables affecting the current situation is that problems in the mortgage markets were continuing to impact condo sales, according to the report published on NAHB’s website.
For buyers, all the evidence is pointing to a prolonged buyers market, where prices will continue to stabilize, while builders will hand over plenty of closing cost assistance and unit upgrades to help move the inventory.
Published: February 19, 2008
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Mr. Carr has covered real estate since 1989. He is the author of