The construction of new condo developments in the area is virtually non-existent. There has been some finishing up of projects abandoned during the market downturn of a few years ago but no new construction to my knowledge. During the 1980’s and 1990’s this area was a hot bed of condo construction. Prior to the market downturn there was also a rash of apartment conversions. All this has ended rather dramatically.
I think that construction defect lawsuits are most likely the major factor here. The condo community of “Elan” was the first to receive a major construction defect award in this area, I believe. It was a award of several million dollars. After this it seemed like every condo development existing were there was a entity left to sue filed a lawsuit. Builders now have to factor in the cost of insuring against that type of litigation and after building in that cost, the expense of constructing a condo development likely becomes prohibitive.
The market for resale condos is still very active. I did some calculations using raw data from the local MLS and found that resale condos have increased in price 16.8% over the last twelve months. That is a much greater increase than that for free-standing homes. What really came as a surprise to me was when I ran the numbers for high-rise condos. To double check the reliability of my figures I did a 3 month rolling average using December, January and February ending with February this year and compared it with the same averages a year earlier. There has been a 6% drop in high-rise condo prices. I have no idea how to evaluate that.
