Dallas Condo Market Tanking, Defaults Picking Up
The Dallas News shakes down the condo craze. "I refer to the data on condominiums, those tall towers of speculation that so personify this housing bubble. After peaking at a 963,000 annualized rate in June, U.S. condo sales are off by 11 percent; they hit 857,000 in November. Speculators' tempered enthusiasm has driven price gains down to 10 percent from 18 percent in June. Most notably, condo inventories have doubled in a year and a half.""Local real estate types tell me that out-of-staters are behind much of the oversupply that's set to flood the market next year and the year after. They say some of the behemoths under construction have been sold to more speculators than future residents. I've got news for local developers: Speculators are dumping condos from Vegas to Miami. Some buyers are breaking contracts before construction is complete."
"That leaves Dallasites to hold up the value of these yet-to-be-completed high-rises, just when the market is playing dead. Here's as brief a snapshot as I can offer on the health of the local market. D-FW foreclosures rose 4 percent in 2005 to a cycle record of 32,513. The only year that was worse was 1989, an ugly time. The percentage of foreclosees who owed more than the property was worth rose to 16.2 percent from 14.4 percent in 2004. Foreclosures linked to home-equity defaults leaped 52 percent, to 5.6 percent of the total, from 3.7 percent in 2004."
"The reality is, local buyers are in no shape to ride to the rescue of the current oversupply of condos, much less any elephants-to-be reaching for the sky."
posted by Ben Jones @ 4:37 PM
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Here's another blurb from today's Dallas News on forecloosures
Near-record-low interest rates and an improving economy weren't enough to put the brakes on North Texas home foreclosures.
More than 32,000 homes in the Dallas-Fort Worth area were posted for forced sale this year by lenders, an increase of 4 percent from 2004.
That's a whopping 55 percent jump in foreclosures from 2002.
Real estate analysts blame the home loan defaults on record-high credit-card debt and continued corporate cutbacks.
Another factor is that many marginal homebuyers have used "creative" mortgage plans to get into houses they can't afford.
Expect more of the same in 2006.
January's home foreclosures are already up 4 percent.
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