More Condo Conversions?!

flag of condo modelI’ve suggested elsewhere in this forum, that the reason there are so many condos still going up, despite the slowdown, is because they were already in the “Oh-crap-can’t-stop-it -now” pipeline.

But there’s another reason. A more encouraging one. Despite what you may have been reading about the market, developers from other states recognize that Florida just isn’t like the rest of the U.S.

Take MCZ/Centrum Development Corp., for example, a Chicago based firm. Even this late in the game, they are planning two more conversions for the Orlando area. Mirabella, located at the far end of International Drive, and The Palms Club, located in, yes, you guessed it, Metrowest.

“What?” I hear you scream. “Are they nuts?” Maybe. But principal Michael Lerner believes that Orlando is still a growth market. “Orlando is a vibrant city and is becoming the business center of Florida,” he said.

You have to believe folks like this know what they’re doing. After all, buying the two complexes cost them over $100 million. Now that’s what I call putting your money where your mouth is.

“I got the… Condo Conversion… Blues…”

confused woman at partyA girlfriend asked me at a party this weekend: So what exactly IS a condo conversion?

That’s easy, I said, It’s when a community that was once for sale converts back to being rental again.

Oh, I see, she replied.

Except she didn’t. Thankfully, she’ll probably never sue me for my humor because the truth is, nobody has any idea anymore who’s going condo or, more importantly, who’s turning back to the dark side “or, who’s turning back (but only half way); or even, who was turning back (but isn’t anymore because they think they might just pull it off – if only the Fed would stop screwing with the interest rates.)

Anyway, welcome to Rumor Control. If you have a rumor, I’ll be waiting!

Some markets more equal than others

BusinessWeek.com screened data from the National Association of Realtors (NAR) to identify markets with the highest home-price appreciation during the second quarter.

Nationally, home prices increased 3.7 percent in the second quarter. But these top 10 markets all saw prices climb at least three times faster than that:

* Virginia Beach-Norfolk-Newport News (Va.-N.C.), up 23.6 percent from a year ago
* Portland-Vancouver (Ore.), 19.1 percent.
* Tampa-St. Petersburg (Fla.), 18.8 percent.
* Eugene-Springfield (Ore.), 18.3 percent.
* Orlando (Fla.), 17 percent.
* Los Angeles-Long Beach, 14.6 percent.
* Phoenix-Mesa (Ariz.), 11.8 percent.
* Philadelphia-Camden-Wilmington (Pa.-N.J.-Del.), 11.4 percent.
* Hagerstown-Martinsburg (Md. -WVa.), 11.4 percent.
* Norwich-New London (Conn.), 11 percent.

Source: Business Week Online, (08/23/06) Christopher Palmeri and Douglas MacMillan