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property in dubai
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Apartment Buildings Turned Into Condominiums Return
Many rental buildings that were converted to condos are returning to the rental market amid slowing condo sales. This is indeed a concerning news for the apartment landlords. Their dreams of high rents in the next year would not see the light of the day due to this trend.
According to Reis Inc., a real-estate research firm in New York, the apartment inventories have sneaked up for the first time in the last two year. It is because of the failure of condo conversions in a slowing housing market.
Even the small rise is an indication of change in direction. Nationwide, the number of apartments increased by 8,900 units in the third quarter, out of a total of 9.1 million. It includes complexes of over 40 units. The data-collection firms are facing difficulties to poll individual condominium owners who may own, and rent out, only a single unit. That’s why, Many units being rented aren't counted in statistics.
The rent growth is forecasted for a lower level of 3.6% in 2007 by Mr.Chandan.This .downward trend is partly due to condos coming back on the market as rentals. While Reis predicts rent growth nationwide to be 4.2% in 2006.
According to McCabe Research & Consulting, Florida is considered to be the epicenter of the conversion market. Out Of total 63,000 units, 4,000 units already have turned back to rentals after promising to go Condo.. However, It includes only the complexes with more than 100 units and doesn't count the individuals who might be renting units on their own.
Jack McCabe, head of the Deerfield Beach, Fla.-based analysis firm says, "We are going to see a lot more of it in the next six to 12 months all across the country," "There were just so many conversions done at the same time and that made a glut of units." According to him, The same trend is prevalent in Boston, Florida, Las Vegas, Phoenix, San Diego and Washington, D.C..
The renters will indeed be happy with the slowingdown in rent increases. A continued strong rental market could absorb the inventory. As there is fall of home prices in Condo and some other areas, the home buyers will not be interested in purchasing the properties. Actually, They don’t want to risk their money. Resultantly, rentals will continue to appeal to the wait-and-see crowd.
Tarragon Corp., a real-estate investment trust, bought a 294-unit complex in Sanford, Fla., near Orlando, this year. They named it Ballantrae. The plan was to fix up and sell off the units, but the buyers didn't materialize. Many of the renters had left, leaving Tarragon scrambling to refill the complex.
The New York-based company has bought five other properties for conversion. Keeping in view of the present trend, it will keep these properties as rentals for the time being.In order to entice the renters back, the company is offering a free month's rent as renovations at one in Naples, Fla. Other Florida projects reconverting to apartments include the San Merano at Mirasol, a 476-unit complex in Palm Beach County owned by Kolter Properties Inc., and the Gateway Club at Orchid Lakes, a 319-unit complex in Boynton Beach, owned by MSP Enterprises.
Robert Pinnegar, executive director of the San Diego County Apa[1][1]rtment Association, an owners' group, is not optimistic of condos going rental having a big impact on the overall market. However,the localized areas may experience price pressure as converters flood units onto the market. The local Mission Valley neighborhood is cited as one area that could "see some volatility."
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