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Post by jeffolie on Jul 31, 2007 11:30:53 GMT -6
Lofty dreams for condo hotels come crashing down Christopher Boyd | Sentinel Staff Writer July 29, 2007 Condominium hotels may go down as one of the briefest fads ever to sweep the real-estate industry as the market slumps in Central Florida -- only a year after it peaked. Potential buyers are disappearing and financing commitments are falling flat, leaving condo-hotel developers with an uncertain future. Last week, the first such hotel to open in downtown Orlando filed for bankruptcy protection, a failure the developer blamed on a rapidly changing market. "Our sales were good in the beginning, but it got bad, bad, bad and then even worse," said Barry Greer, an owner of The Lexington at Orlando CityPlace. "The market was red-hot when we started this, but it folded up before we could close it out." www.orlandosentinel.com/news/custom/growth/orl-condohotel2907jul29,0,6430956.story
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Post by unlawflcombatnt on Jul 31, 2007 15:25:17 GMT -6
This is just another example of a greedy developer and greedy home speculators letting their greed overwhelm facts and common sense. As far as I'm concerned, both the developers and the buyer-speculators are getting exactly what the deserve. The "tapping of home equity" to buy additional homes, and profiteer by selling at a higher price to residential buyers, was the major driving force behind the housing bubble. Greedy homeowners, armed with the increased borrowing ability from home price appreciation, along with an irresponsible financial industry, have bought 2nd, 3rd, & 4th homes, in order to resell them at a huge profit. In so doing, they increased the demand (and prices) of homes by investing their borrowed home equity that resulted from home price appreciation. Of course, this caused even further appreciation of home prices, still further increasing the home equity they could extract, allowing for still more home speculation.
The percent of homes bought by these investor-speculators is estimated to be as high as 40% of homes bought over the last 2-3 years. It is these very speculators who are responsible for homes becoming unaffordable to most people (especially in areas like California, where median-price home affordability is less than 10% of the population.)
Below a truly revealing quote from the article, showing exactly where the problem is:
"Alexander said that during the real-estate boom that ended last year, homeowners tapped their equity to make deposits on condo-hotel units...."
And then, the developer turns around and tries to dispute that speculation ("investment") is involved, with the following piece of hogwash:
""We have firm deposits on 20 percent of the units," Scott said. "These aren't investments. They are second homes.""
Not "investments"??
What complete B.S. A person can only live in 1 home at a time. A 2nd home is an investment-- it's an attempt to buy a home and resell it for a higher price, or rent it for more than its monthly cost.
These speculators have driven home prices up with their greed, coupled with their refusal to face reality. Now they're going to lose big time.
Which is exactly what they deserve.
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