Condominium Sales in Dane County

Should we be surprised that condo sales rose in the first quarter of 2010? Maybe. Money was tight as lenders drew firm lines on what they required before getting involved with a loan on a condominium and for good reason. With owners falling behind on mortgage payments these same people certainly were not making payments on their association dues and the budgets of the associations with rising mortgage distress were getting weaker by the month. Lenders were wisely reluctant to risk becoming potential owners in condominium projects with no money for upkeep in their coffers.

A review of the sales across Dane County shows there is more to the number than will meet the eyes.  Owners paid dearly for the attention of the buyers. Getting an offer meant reducing prices and getting an acceptance on an offer required end of the day concessions of 10, 20, 30, and even 40 percent off of original asking prices.  Agreed there were worse results elsewhere in the world, if you were the one who sold for less than you paid or choked down a $21,000 loss of equity which you had other plans for, the pain was as real here as it was in the Southwest USA.

Not all owners were hit equally hard. Developers, in some cases may have benefited from  the assistance of lenders who created financing incentives to bring buyers to undersold projects. The result is the risk gets spread, but prices paid in 2006 were not supported. Units which were first offered for $279,900 in one project sold for under $230,000 in the spring of 2010.

Should you buy condos? Maybe. A glass half empty idea is to look close at the financial records of a condo project you'd like to live in. Then look further to see if the condo fees are reasonable or artificially low. Before deciding on  a price to offer, make sure you have done your homework on the recent sales. You may be able to find out more details on the financing and purchase packages negotiated by buyers in the spring. If extraordinary incentives caused sales to happen at $250,000 for example, the $250,000 price is probably not the true market value without the incentive.

Or, consider this suggestion mere self righteousness and rush in with a glass half full of confidence...