Ailing Condo Market Could Get Worse
Connecticut’s condominium market has been clobbered this year. Condominium sales have dropped by double-digit percentages — sometimes as much as 35 percent to over 40 percent — year-over-year for 18 months straight.
The decline moderated a bit in July, August and September, according to The Warren Group. In fact, The Warren Group’s latest numbers show that condo sales in September were essentially flat compared to September 2008. But condo sales are off a whopping 27 percent for the first nine months of the year compared to the same period in 2008.
Condo prices have also slumped, falling by 11.5 percent.
And the news for the condo market could get worse. As Ian Murphy reported in a recent story in The Commercial Record, new Federal Housing Administration rules could further erode condominium sales. The new rules, which go into effect next week, limit the number of FHA-insured loans per condo building to 30 percent.
They also require that condo association report on their reserve accounts annually. We’ll see how much prodding it will take before the FHA adjusts those rules …