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Daily Real Estate News  |  October 9, 2007  |   Judgment Day for Condo Market: Boom or Bust?
Many condo projects that were started during the real estate boom are just being completed, and developers and the banks that loaned buyers money are holding their collective breath that buyers will close — rather than abandon their deposits and walk away.

''We're at the riskiest point of the condo lending cycle as these projects are being completed,'' says Jefferson L. Harralson, a bank analyst at Keefe, Bruyette & Woods. ''In the coming weeks and months, we're going to find out what the demand for these condos really is.''

Nationwide, the number of condos completed this year will be up 45 percent — 232,933 vs. 160,239 — from 2006, according to data tracked by Marcus & Millichap Real Estate Investment Services, a real estate investment brokerage.

But so far this year, condo sales have fallen 12 percent through August, Marcus & Millichap says. Trends in Las Vegas and Miami are worse, with sales off 46 percent and 29 percent respectively.

Jack McCabe, a real estate consultant in Deerfield Beach, Fla., isn’t optimistic that things will pick up anytime soon. Hedge funds and other investors have hired him to study eight of 12 projects in Miami that Corus Bankshares, one of the largest lenders to condo developers, has financed.

''In this market downturn, even the most successful developers with the best projects and the best geographic locations are going to take hits,'' McCabe says.

Source: The New York Times, Christine Haughney (10/09/07)

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