The Washington Post reports that thousands of condos are becoming apartments. "The surge of well-to-do new renters is attracting developers, and at least 4,000 units that had been planned as condos will instead be leased as rentals over the next two year."

"Among the renters is Randell Rogers, a systems engineer who earns $127,000 a year and recently sold a house. The housing-sale slowdown and sky-high prices have made him wary of buying again, and he is renting a two-bedroom townhouse in Herndon for $1,400 a month, about half of what he thinks he would pay each month if he bought a similar townhouse for about $450,000."

"'It makes more sense to rent this year while values keep going down,' Rogers said. 'Even with the tax break, it doesn't make sense for me. It's just not reasonable to buy.'"

"Other affluent families are doing the same. Laura Holliday, and her husband, tired of the chores associated with homeownership, the heavy mortgage payments and the hassle of commuting each day to the District from the Mount Vernon area of Alexandria. They sold their house in July 2005 and moved to a townhouse in the Clarendon area of Arlington, where they can commute to work by Metro and have more time to spend with their two young children."

"'We probably won't rent forever,' Holliday said, 'but for now, we are definitely enjoying renting.'"

"'Every large developer I know is working on a project that was expected to be condo, and that they are now taking back to apartments,' said Mark Coletta, (who) is building about a dozen projects in the Washington area. 'That's what everyone is doing.'"

"Stephen Muller, who is building a 183-unit project, said he began considering the shift after a well-heeled family rented a single-family house he owns, saying they did not think it was a wise time to buy. 'I think it's frankly smart,' he said."

"Coletta said he was influenced by the performance of Fairfield's condo projects in Fair Oaks, Herndon and Germantown. 'All are doing fine, but we've clearly see fatigue on the part of the consumer,' Coletta said. 'Traffic has dropped off, contracts have slowly declined. You see the writing on the wall at the same time apartment fundamentals are improving. It makes the business decision a pretty easy one.'"

"Developers who proceed with condo plans face a flood of competitors. There are some 26,600 condo units being marketed in the Washington region, up from about 23,100 in the same month last year. But there are some 48,000 units moving toward construction."

"Economist Gregory Leisch said that condo developers increase the base price of units so existing owners and new buyers feel confident they are buying into a rising market, but that then they offer concessions, better appliances and upgrades, picking up part of the closing cost, so new buyers think they are getting a good deal."

"'It's the old shell game,' Leisch said. 'You increase the price to reduce the price so after all that nonsense, the price is unchanged. Car dealers do it all the time.'"