Condo development scarce outside Miami, New York

Miami /
Jul.July 25, 2015 03:10 PM

Residential condominium development is robust in such cities as Miami and New York, but in the rest of the country, new condos are scarce.

Condo construction comprised 5.5 percent of total U.S. multifamily construction in the first quarter. It was the smallest such percentage since the Commerce Department started following construction data in 1974 and well under the average of 24 percent.

The national data obscure regional differences.

In Miami and New York, condo markets have staged strong rebounds, largely because they attract wealthy foreign buyers who can cover most of a condo’s price with cash.

In the rest of the United States, condo construction aimed more at middle- and lower-income buyers has dropped off.

Resale price increases for single-family home are outpacing those for condos.

In May, the median resale price of a condo was $216,400, or $15,000 below its June 2005 peak prior to the housing market downturn in the late 2000s, while the median resale price of a single-family home was $230,000, just $600 below its July 2006 peak prior to the downturn.

From 2008 to 2012, the Federal Housing Administration (FHA), which backs mortgage loans to buyers with little wealth, toughened it standards for lenders.

For example, FHA no longer insures mortgages secured by units in a condo building unless at least half of the units are occupied by owners.

Nor will FHA insure units in a condo building under construction unless a minimum of 30 percent of the units are under contract to be sold. [Wall Street Journal] Mike Seemuth


Related Articles

arrow_forward_ios
From left: Tony Pettiti, Krispy Creme's Michael Tattersfield, and BitPay's Stephen Pair with 1500 Beach Road
Jeffrey Soffer sells out SeaGlass for $169M — here’s who’s moving in
Jeffrey Soffer sells out SeaGlass for $169M — here’s who’s moving in
Miami Skyline
South Florida by the numbers: A look back at 2022
South Florida by the numbers: A look back at 2022
From left: Taylor Collins and Jon Paul Perez with Rivage
Related, partners launch sales of Bal Harbour condos, with PH asking over $65M
Related, partners launch sales of Bal Harbour condos, with PH asking over $65M
From left: Charles Kushner, Laurent Morali, David Arditi, and Nicole Kushner Meyer along with renderings of 1900-2000 Biscayne (left) and 2222 Brickell Avenue (right) (Getty, Kushner Companies, Aria Development Group)
Miami board to vote on Kushner’s Edgewater rental project, Aria’s Brickell condo building
Miami board to vote on Kushner’s Edgewater rental project, Aria’s Brickell condo building
From left: Edgardo Defortuna, Dan Catalfumo, and Carlos Rosso with The Ritz-Carlton Residences
Inside South Florida’s branded condo tower boom
Inside South Florida’s branded condo tower boom
Chain's Deepak Thapliyal with 8955 Collins Avenue (Chain via Twitter, Google Maps, Getty)
Arte Surfside PH purchased with crypto sells at a loss for $18M
Arte Surfside PH purchased with crypto sells at a loss for $18M
Kolter Urban’s Bob Vail with rendering of Selene Oceanfront Residences (Kolter Urban)
Kolter nabs $240M construction loan for Fort Lauderdale condo towers
Kolter nabs $240M construction loan for Fort Lauderdale condo towers
Miky Grendene (YouTube)
Watch: Casa Tua founder on hospitality-branded developments, partnering with Fortune and barefoot luxury
Watch: Casa Tua founder on hospitality-branded developments, partnering with Fortune and barefoot luxury
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...