owner-residents are the first to notice that the building standards
are starting to slide. The smart ones sell their units and get out
At one condo I know, over 60% of the original owner-residents sold their units within the first five years. Most did not make any money but were content to break even. A good number of them took a loss.
These were not "investors" who flipped their units but owner-residents who saw that their corporation was heading down market and they elected to sell and get out while they could.
I met a man who paid $180,000 for his two-bedroom condo in 1998. Twenty-three years later his unit was worth $120,000—tops. What a great investment!
In a market where condo prices are rising every year, a building with low prices and really low condo fees are seen as a bargain by lower-income people who dream of home ownership.
They don’t know that the property values at these corporations may be way overpriced, (even if the prices seem low), and these buildings are on, or will soon be on, a downward spiral.
Once the rot becomes more noticeable, units stay on the market longer. The real estate agents and the buyers notice that the condo is slipping and the offers are less frequent and for less money.
In response, some owners rent their units because they cannot sell them at a “reasonable” price. An increase in the number of renters adds to the decrease
A serious water leak that would
discourage any buyer