Friday, August 28, 2009

Condo association meltdown

Condos are cheap, but some hike fees to cover for owners who refuse to pay -- "Desperate condo associations are starting to seek court-appointed receivers — a trend that started in South Florida but has spread to this part of the state. It's a sign of how dire the situation is, said Donna Berger, executive director of the Community Advocacy Network, a nonprofit group representing more than 1,500 condo and homeowner associations. 'The current economic downturn and foreclosure crisis have placed many associations on the brink of disaster,' she said."
A grim situation, indeed. And as the story explains, many associations are going into receivership.


Fred Pilot said...

Interesting read. What appears to be happening is the difficulties in the real estate market are accelerating Tyler Berding's timeline of the stages of a condo project's lifespan such that many are entering stage 4 (death spiral) earlier than they might otherwise. Condos can be very volatile and risky real property investments in the best of markets and have become even more so in the current depressed market.

Beth said...

I just talked a friend out of buying a condo in one of those huge, amenity-laden projects that completed post-bubble and is having trouble selling units. She really wanted the doorman, pool, gym, etc. etc. I said, "Well, it would be great if you don't mind maybe losing your money." She was pretty ticked off at me--but then decided to rent. I can't remember--did Berding's model predict any kind of possible afterlife? I guess we'll soon see if/how condo projects recover from death spirals.