[ClaireSolt]

I am wondering if thee contracts to buy later are a type of deritive. I hear them discussing them on Cavuto. I have sold contracts for future revenues and I have experienced that risk. These people want their money back. Maybe they bought a whole floor for pennies on the dollar. The developer sold the paper to raise capital, and now someone is holding a worthless promise. I am guessing. Do you know?

My daughter lives in Miami and she says that there are still lots of New Yorkers who will buy those condos.

[BurbankKarl]

Well, a lot of people that bought were speculators, and when the prices were skyrocketing, they sold their spots to other people, who then sold them to other people.

Since the prices of the condos are falling, people who are locked in to by the unit at a higher price are balking. In fact, the banks will only lend what they feel the unit is worth, 70 or 80 percent of the flipper prices.

San Diego is also getting hit bad....the houses at auction are fetching 70% of their peak “price” from 18 months ago....and it is just the start of the foreclosures. Condos usually fare worse. And apartment conversions to condos fare worse worse.

[bruinbirdman]

More than 25,000 condo units under construction or planned in Las Vegas. At least that many were planned and scraped in the last couple of years. At least that many have been completed and sold.

I only know certain parts of stuff.

One is something like a hotondo or condotel. Half the units, more or less, in the project are hotel rooms the others are sold as condos with hotel services. Owners of the condo units use the management services to rent out their unit as a hotel suite, complete with services, while they are absent. Something like the latest takeoff on time share units, but rental revenue minus overhead goes to individual owners. I understand anecdotally that, if the owner is absent, the income may or may not cover the mortgage payment. Profit is another deal.

Several large highrise condo projects have gone belly-up the last couple of years here. Bankruptcy usually leaves depositors at the bottom of the creditors' list.

Can't say how many are speculators, but Las Vegas has no problem building giant casino hotels with 5,000+ rooms and separate residential highrises (towers, condotels).

yitbos

[neb52]

Atypical construction loan requires 20% down. Developers require the deposits to cover this. Depending on the size of the developer depends on the request deposit. I have heard anywhere from $5,000 to $20,000.

Condos and Townhomes are niche market properties. Keeping from over saturation is important on those type of properties. If developers overbuilt then it is the cities fault for allowing to many projects of that type to occur. At least around here in DFW the cities will monitor rental properties and condo/townhome percentages to help decide on project approvals.