Frequently Asked Questions at Condo.com

We get a number of calls every day from individuals and groups seeking to buy and sell individual and blocks of condos. Here are some of the frequently asked questions and answers:

Q: When will we hit bottom?

A: The market needs to begin to clear before we hit bottom. As lenders recognize the lost value of the properties they control by default they will begin to mark the properties down. Once the write downs get to the point when book values have declined to market value, trades will occur.

Q: When will we be able to buy condos at a deep discount?

A: The folks that control the property are in flux. At this time, many developers still have inventory they would like to sell. However, the market clearing price is typically below a number that the developer can accept. The bid-ask gap is narrowing but it is not completely closed yet. Some developers and lenders have made “creative” transactions to move properties but these are few and far between at this point.

Q. Will the discounts be as big as we have seen in past downturns?

A:  There is a lot of capital out there "chasing deals". There are a lot out there. More every day. Simple supply and demand dictates that deep discounts will not be seen as these groups bid up the price properties that are made available.

Q: Are there any transactions closing yet?

A: Some buyers are out there willing to meet sellers prices. However, the structures usually include some form of seller participation in the sale price to the end buyer.

Q: Will all the markets “thaw” at the same time?

A: Markets with drastic oversupply will take longer to adjust than those that have smaller overhangs. It could be many years before South Florida’s urban high-rise overbuilding is absorbed.

Q: How can condo.com help me now?

A: For developers, condo.com can increase the number and velocity of potential buyers looking to buy units at the project. For mezzanine and senior lenders condo.com can help in all phases of the process…asset preservation, bulk brokerage, individual unit sales, market data, detailed financial reporting and other customized services.