Condo Market In Jacksonville
http://www.LiveAtTheBeach.net

Edited by Richard Newquist

ORLANDO, Fla. – Feb. 13, 2007 – The condo craze is over but the condo market isn’t dead yet, builders and developers gathered at an industry trade show said last Thursday.

The glut of condominium projects under construction in markets from Miami to Jacksonville means that thousands of new units will flood an already large pool.

The Florida Association of Realtors says while the condo market has experienced the same slowdown in sales as the single-family home market, declines in local markets have been less severe...but not much.

For example, 2006 condo sales in Palm Beach County fell 28 percent from the previous year, while single-family-home sales dropped 37 percent, the association says.

One of the great problems in the Jacksonville area, said Richard Newquist, agent for Coral Shores Realty is that so many condos in our area, especially Ponte Vedra, are condo conversions. The association fees started out low--maybe artificially low--but they had to be raised to cover the actual costs. A 2/2 in Ocean Grove started out at $180/month fees but are not up to $340 per month. Combine that with rising interest rates and many buyers have suddenly been priced out of the market.

Sharon Dworkin Bell, the National Association of Home Builders’ senior staff vice president for multifamily housing, said condos remain an attractive “lifestyle choice” for many home buyers. Developer Donges agreed.

“Today’s buyers want to live close to work, transportation, entertainment and retail,” he said. “A great location, a distinct product and a good price for your market are critical to a condominium community’s success.” Developers say don’t expect condo construction cranes to create downtown traffic jams forever.

But from Miami to Jacksonville, there are thousands of unsold condo units that have to be absorbed as a result of builders trying to satiate the region’s perceived demand for condo units. Many of the region’s high-end rental properties were also converted to condos. But that all came to a screeching halt last year as a growing number of high-priced units found a shrinking number buyers.

Because income has not kept pace with double-digit home-price appreciation, many would-be home buyers have become or remained renters.

In Palm Beach County, a survey by the Housing Leadership Council showed that 90 percent of the workforce could not afford the median-priced single-family home, which cost more than $390,000 at the time.

For all of 2006, with the boom over and housing prices falling, the median-priced single-family home remained out of reach at $384,700.

At the peak of the condo frenzy, developer Donges said, he was building about 80 percent condos and 20 percent rental apartments.

Today, with investors out of the condo market, Donges said the 2007 forecast calls for a reversal in the multifamily formula: condos, 20 percent; rental apartments, 80 percent.

This is especially true in markets where the rental market is tight, such as Palm Beach County, where some of the rental properties that converted or began converting to condos during the housing boom have begun turning back to rentals.

In markets where affordability is a major issue, such as Palm Beach County, rental apartments will be a prime focus of developers, Donges said.

This is the edited version of Copyright © 2007, The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Business News.