Sunday, October 12, 2008

Portland's condo boom now a total bust

From the Oregonian:

Portland's once-thriving condo market reached new depths in the third quarter amid the worldwide financial crisis. The young professionals and empty-nesters who once powered the downtown condo construction boom have gone missing. Prices are falling, but potential buyers face more trouble securing mortgages for new purchases or selling their old homes to cash out their equity.
Portland's condo market remains far better than places such as Miami and Las Vegas that saw even more feverish condo building. But Portland condo brokers, who six months ago sounded upbeat tones, now publicly acknowledge the first significant downturn since the condo market took off in the late 1990s.

Realty Trust City, Portland's leading firm in new condo sales, reports 884 new units available in central city towers.
Based on an average of 14 sales a month over the third quarter, downtown has enough to feed current market demand for an astounding five years. That's about six times the duration of inventory for all Portland-area homes at their current rate of demand.
For the first time in years, no cranes are spinning over a future condo tower on Portland's skyline. All remaining cranes are helping to sprout offices or apartments.
Patrick Clark, a Realty Trust City principal, expects one or two more condo buildings to convert to apartments and, after the worst of the crisis passes, condo sales to pick up. He estimated that the current condo surplus will sell out within 18 to 24 months.

"Prices may have to come down 10 to 15 percent or more, maybe even up to 40 percent, in order to move inventory."