Monday, March 13, 2006

Everything But The Kitchen Sink

We've all heard the phrase before and it certainly appears to be fitting the current level of desperation in the local condo market. A news story in the Palm Beach Post details the lengths to which some developments have gone to prop up sales given the sudden shift in the market.

"More on the cool-down in condos: One of downtown West Palm's better-known apartment-to-condo conversions is tapping the brake on sales, if only for the next month or so.
Less than a year into The Strand's conversion, existing renters are being offered 90-day extensions on their leases.
More business news"

"Why allow rentals? A spokesman for Strand's Atlanta-based owner, Primegro Strand, explains it this way: "We are comfortable with our inventory" available for sale, he said."

"Inventory is plentiful: Since the 15-story luxury apartment building at the corner of Evernia Street and Narcissus Avenue was declared a condo in April of last year, approximately 200 of the 275 units remain owned by Primegro Strand, according to Palm Beach County property records."

"Meanwhile, Ken Prosper at Century 21 Richards Realty advertises on Craigslist that the developer behind the condo-conversion of Boynton Beach's St. Andrews apartments is offering to make the first year's mortgage payments for new buyers."

"Buyers also have the option of deducting that first year's worth of payments from the cost of the property, or putting the money toward closing costs. The very few strings attached: The lender must be mortgage giant Countrywide, and buyers have to put 10 percent down."

"All of which helps explain why Craig King's phone started ringing about last June. The president of J.P. King Auction Co. in Gadsden, Ala., has not done much work in South Florida, or with condos, for that matter. The 91-year-old company's bread and butter tends toward lush estates, seven-figure townhouses and the occasional big toy: The firm auctioned off a $5 million yacht in Fort Lauderdale. That was last year. This year, "What we are seeing in the industry now is not just high-end sellers but developers, who are saying, 'Hey, how does this auction thing work?' And now frankly, we are getting calls from your market."

"King said he's had two phone calls in the past two weeks from condo converters whose sales have turned unexpectedly sluggish. Of course, there are still those luxury parcels available: Okeechobee's Sundance Trails Ranch and its dozen or so equestrian home sites go on the block March 18."


At 1:26 PM, Anonymous Nembden said...

Just want to say that I appreciate your blog, man. i worked most of 2004 in South Florida for a real estate firm, and back then I thought the housing market was ridiculous. I actually had to move out an apartment complex in Aventura because of condo conversion. It seems like all the latecomers are finding problems selling all the units and now have to hunt for renters all over again...

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