Friday, March 21, 2008

Condo Woes

by Bill McBride on 3/21/2008 08:11:00 PM

I've mentioned several times that many condos (especially high rise) are not included in the new home sales and inventory report from the Census Bureau. For those areas with a large number of high rise condos, the supply of housing units could be much higher than the Census Bureau statistics would indicate.

Jennifer Forsyth and Jonathan Karp discuss the condo supply problem in the WSJ: Woes in Condo Market Build As New Supply Floods Cities

More than 4,000 new units will be completed in both Atlanta and Phoenix by the end of the year. Developers in Miami and Fort Lauderdale, Fla., are readying nearly 10,000 total new units in a market already struggling with canyons of unsold condos. San Diego, another hard-hit region, will add 2,500 units, according to estimates provided by Reis Inc., a New York-based real-estate-research firm.

The new building comes on top of unprecedented supply.
...
Lenders of all sizes have $42 billion of condominium debt on their books, according to Foresight Analytics. In just three months -- between the third and fourth quarters of last year -- the delinquency rate rose to 10% from 5.9%, says the Oakland, Calif., research firm.
If I'm reading this correctly, this is the delinquency rate for condominium construction and development (C&D) loans.

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