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Is It Time to Pounce on a Condo?

In a recent article in Money Magazine, the question of whether it’s the right time to buy into the condo market was the story.  Statistics showed that nationally, condos have dropped in price by 20%, while harder-hit areas have experienced price drops of around 60%.  Las Vegas is closer to that high number in some cases, and there are arguments for buying, with cautions.
Are we at a bottom? –
Just because prices have dropped a lot over the last three or four years, it doesn’t mean we’re at a bottom.  If you jump into a condo now, would there be a chance of losing another double-digits in value?  While there is data supporting the assumption that condo prices are stabilizing along with single family home prices in Las Vegas, do a thorough analysis.  Get a real estate professional to work with you who can use studies of “absorption rates” and other statistics to compare current sales to listing inventory and determine if there’s more supply or shrinking supply to help prices hold or go up in the future.

Can You Get a Loan? -
The rules have changed a lot in mortgage lending, and the most in the condominium markets.  Lenders want higher down payments, and they want to escrow homeowner fees for longer periods.  There are new rules about percentages of project ownership and vacancy or number of units in foreclosure.  There are new fees to originate condo loans that drive up the cost as well.  And, sometimes a higher interest rate is part of the deal.  But, with rates at historic lows, even extra fees and a slightly higher rate can’t negate the value of rates at these levels.

There Won’t Be a Bidding War –
Well, there shouldn’t be one anyway.  With lenders being more careful, and buyers needing higher down payments, those with good credit and the cash to buy will probably have little or no competition, giving them the ability to drive a hard bargain.

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