Downturn impacts landscape for condos
Mon, 05/11/2009 - 11:05
Two years into the housing downturn, the condo market in the Salt Lake area is starting to take a real beating.
Sales in Salt Lake County are down a sharp 37 percent in the first quarter, compared with a year ago. Median selling prices are down 8 percent over the same time period, a much larger drop than the just under 1 percent decline in single-family homes.
From Sugar House to downtown and beyond, many condo projects are on hold. Others are moving forward, but their future is uncertain.
Condo markets often suffer more in downturns, but this time around could be worse because of the added scrutiny lenders are giving to such projects.
"Banks aren't crazy about financing projects, and they're even less
crazy about giving people money to buy them," said Rick Howa of Howa Capital, who has put a venture west of the State Capitol on hold because of the challenging economy.
Condos historically are considered a higher-risk investment than single-family homes. During downturns, they tend to lose value more quickly.
But Salt Lake City mortgage lender Al Bingham said the subprime lending debacle -- and the huge losses that followed -- have lenders taking an especially hard look at this segment of the market. Original Article
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