Condo Crash Is Just Beginning

Glut of new units and failing contracts yet to peak

By Sam Biddle,  Newser Staff

Posted Aug 25, 2007 11:40 AM CDT

(Newser) – Mortgage lenders are about to be hit with another wave of foreclosures and bankruptcies, the Journal reports, as the crisis kicks in in condo market. Because buildings take years to complete, even after buyers have signed contracts, the effect of declining property values and tight credit are slower to talk effect than in single-family homes.

 

The number of new condo units built in 2006 jumped 145% to 102,800, from 41,900 in 2003. But many of these units are going unsold, or buyers are backing out due to mortgage troubles and sinking condo prices in a glutted market.  "More of the iceberg is being revealed, but we haven't seen it all yet," says an Atlanta real-estate investor.

A man walks in front of a real estate loans office in San Mateo, Calif., Friday, Aug. 17, 2007. It's never been tougher to close a deal than during the past few weeks as lenders have gone bankrupt and...   (Associated Press)
Condo Construction Boom Continues In Chicago   (Getty Images)
River City   ((c) Lucius Kwok)
River City Condos   ((c) swanksalot)
Waterfront Square peninsula-01.jpg   ((c) Lucius Kwok)
Real estate sings mounted on homes are shown in Philadelphia, Thursday, Aug. 16, 2007.(AP Photo/Matt Rourke)   (Associated Press)
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