Buyers

The scuttlebutt today was all about the changes to FHA guidelines for condos.

The new rules state that the FHA will not guarantee loans if there is 25% or more commercial space, if an investor owns more then 10% of the units (even the developer), or if they project isn’t primarily residential. This could mean big problems for future mixed use developments.

According to the article at azcentral.com The number of condo foreclosures already out paces condo sales by 2:1.

If the main funding option for first time buyers won’t be there for condos, then their value will drop even further until someone comes in with cash to pick them up.

Here’s my favorite quote from the article:
“However, most have continued trying to sell units, hoping to eventually sell out as the real-estate market recovers. Because of the new rules, local and national experts seem to agree that owner-occupants in half-empty condo buildings are now practically doomed to foreclosure. Hoogendyk said the last thing Arizona’s real-estate market needs is government decisions that hinder its recovery.

“They should be making it more attractive to buy condos, not less,” she said.”

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