Condo Completions Surge While Demand Ebbs

Yesterday’s New York Times observes these are challenging times for condo developers…

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…

Nationwide, the number of condos completed this year will be up 45 percent — 232,933 vs. 160,239 — from 2006, according to data tracked by Marcus & Millichap Real Estate Investment Services, a real estate investment brokerage based in Encino, Calif.

But sales have fallen 12 percent through August, Marcus & Millichap said…

“In this market downturn, even the most successful developers with the best projects and the best geographic locations are going to take hits,” Mr. McCabe [Jack McCabe, real estate consultant] said.

See also:

AP, 10/10/07: “Steeper Decline in Home Sales Predicted”
The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade…

Nationwide new home sales are projected to fall to 805,000 this year down 23 percent from 1.05 million last year, according to the national Realtors group. If that forecast is accurate, it would be the worst year since 1997, when 804,000 newly constructed homes were sold. In 2008, 752,000 new home sales are expected.