‘Unstoppable Trend’ Becomes ‘So Much Uncertainty’
A pair of reports on the condo market. “Turning apartments into buyable condos was supposed to be one of the biggest trends in San Luis Obispo’s red-hot housing market, but so far this year only 16 apartment units are up for the change. The trend seemed unstoppable last year, when apartment owners lined up in a fierce competition to turn rental space into condominiums. But that was before the market for homes softened up.”
“Then, because there were more units up for conversion than city policy allows, owners began offering incentives such as below-market-price units and open space to entice City Council members into supporting their plans. It was an expensive competition that may have frightened off some potential conversion applicants this time around, said the sole developer offering apartments for conversion this year.”
“‘People talk to the city and they aren’t sure if there is going to be a lot of competition this year,’ said (developer) Brian Rolph. ‘That can scare people off.’”
“The softening could be discouraging apartment building owners from going into the condo selling business because they could get less for their money. ‘It’s kind of scary, as an investor, to go into something with so much uncertainty,’ Rolph said.”
And from Florida. “Various national surveys have identified Naples as the third most overpriced real estate market in the country. Prices soared approximately 50 percent from 2004 to 2005.”
“Cornerstone Group, a developer based in Coral Gables, has recently bought an apartment complex near the corner of Airport-Pulling Road and Pine Ridge Road and is converting it to condominiums.”
“Two things stand out in this situation: In a market where the median price for a home is over half a million dollars, Laguna Bay is offering one-bedroom condos starting at $189,900 and two-bedroom units starting at $249,900; and the company is drawing customers using scantily-clad women waving to passing motorists on Airport-Pulling Road. (The women hold signboards; men are also used).”
“Lawrence Rodriguez, a representative for Cornerstone Group, said that the converted units are so affordable because buyers do not choose decor colors or materials. ‘We gutted the entire unit and we bought everything in bulk,’ he said. ‘There’s no carpet selection.’”
“As for the marketing campaign, it may be a bit risqué for generally conservative Naples. ‘Collier County has come a long way from the days when developers sold land that was underwater,’ said a long-time Naples Realtor who chose to remain anonymous. ‘The county provides lots of information for first-time buyers. I hope young people seek out that information and remain skeptical of marketing tactics that include young men and women beckoning them on the street.’”
“Representatives from the Naples Area Board of Realtors were not available for comment. Rodriguez stands by his company’s product. ‘It’s a really good deal.’”