Sunday, August 09, 2009

Condo Conversion Disaster - Vegas Style
Here is a link to a Calculated Risk post on a condo conversion gone bad in Las Vegas. Here is a quote from the blog that is quoting an article in the Las Vegas Sun:
The property, which had a failed attempt at trying to convert into a condo-hotel because of Clark County regulations, sold for $604 per square foot when it first entered the market. The average price was $539,000, Murphy said.

Through June, the average resale price has fallen to $87,611 or $121 a square foot, Murphy said. With that drop in price has come rising foreclosures. Murphy reports that 201 of the 680 units or 30 percent have been foreclosed upon, and that number is likely to rise. The foreclosures have been running as high as 25 a month so far in 2009, he said.
At the middle of all this is Corus Bank, the condo lending king that will soon be a pauper.


Anonymous said...

what would be the negative impact on the owners who bought units before the bank started foreclosing?

Rational Realist said...

I guess that depends whether the condos were bought closer to $539K per unit or $88k per unit. A fractured condo conversion can spell lots of trouble, especially like this property were a good number of units are sold. Foreclosed units not paying association fees and the the association has bills and obligations. Assessments on owners could be an issue. If the conversion is not complete, who will complete the unfinished units? A large number rental units could impact the overall condo values, i.e. hard to sell a condo when everyone else is renting. A deal like this while it looks good on paper requires due diligence.