In a word: Dismal
Comparing Year-over-Year (YoY) transactions for Q2-2011 to Q2-2010 we are worse off in every possible way with the exception of inventory levels but that isn’t saying much.
We have fewer transactions, lower list prices, lower sales prices – significantly lower median sale price. Average days on market is up 6%.
If there is any good news it may be that the declines are decreasing. The numbers for condo / townhome sales in Q1 YoY for North Fulton West were even worse. This may be an indication that the declines are slowing.
What’s Causing This?
Of course the economy, but there is another issue that is compounding the problem. HOA restrictions on rentals. I have been unable to help a few investors who want to purchase a townhome or condo to maintain as a rental, but every community out there has a restriction on the percentage of rentals allowed.
Owners Should Revolt Against Their HOA’s
In a normal market those restrictions are good for the communities but right now it’s preventing upside-down sellers from renting in order to obtain cash flow, become a move-up buyer or avoid foreclosure. It’s also keeping a lot of investors out of a condo market they would like to take advantage of. If a community could change their HOA covenants to allow a higher level of rentals they would feed demand, spur sales and ultimately drive prices up.
The bottom line for condo / townhome owners is don’t sell now if you don’t have to. Buyers – you can get a great deal but, unfortunately for sellers, it looks like those deals will be around for a while longer.
Owners should revolt? What a selfish response. HOAs are covenants that everyone bought into as a way of protecting their investment. What if you are the family actually living in the development and desire to keep renters/transients to a minimum?
Markets are unpredictable and we ride the waves, not thrown hissy fits when the market isn’t working in our favor.
Kim, hardly a hissy fit, but think about it. With the ability to rent rather than push prices lower in that community or have increased foreclosures, all owners would benifit. Yes, markets are unpredictable, as is life. You can make adjustments to compensate and improve or just grin and bear it. Seems smarter to me to try and fix what isn’t working rather than just sit and take it.