No Bounce For The Condo Market
It’s clear that Connecticut’s condo market is still hurting, despite all the positive news that filtered through about the housing market last week.
The Warren Group, for example, reported that single-family home sales climbed 4 percent in July compared to the same month last year.
But the condo market didn’t get any kind of bounce. It was the worst July for condo sales in 14 years, and sales are off a whopping 33 percent from last year.
If there was any good news to report about the condo market it was that July’s sales decline wasn’t as steep as prior months. There was only a 7 percent drop in sales year-over-year in July.
In fact, as Paul McMorrow reported in this week’s edition of The Commercial Record, July ended a 20-month long (ouch!) trend of double-digit declines in monthly sales.
Tighter lending guidelines for condos by Fannie Mae and Freddie Mac are making it harder to close condo deals. Borrowers intending to purchase a unit in a new complex will have a hard time unless at least 70 percent of the condos are sold or under contract. And no more than 15 percent of the unit owners in any complex can be behind on their condo fees.
Any bargains in the condo market are likely being snapped up by investors who are coming to the closing with cash in hand and don’t have to rely on financing.