Q: I’m attracted to the architecture, location, and efficiency of urban condos, but am worried about oversaturation of the market continuing to depress prices after I buy. If I buy now, will the oversupply continue to depreciate my investment?
A: You’re right in pointing out the incredible benefits to condo living. It’s a great lifestyle that allows for more leisure time and fewer worries about security and maintenance. With Portland’s efficient light rail and streetcar lines, it is easier than ever to leave your car behind. The Zipcar program is convenient, affordable and easy—as their slogan says, to have "wheels when you want them."
It’s true that the condo market became incredibly overheated during the boom times. Many large new condo projects were still being completed well after demand started to slow down. Some condo projects changed course to become apartments instead of owner-occupied units, such as The Wyatt, Ladd Tower, The 3720 (now the Ardea Apartments ) and The Cyan. So a big chunk of the oversupply has already been taken out of the condo market and are now rentals. The rest of the new buildings have been trudging forward through a slow market. This has made developers and financial institutions come up with various promotions to increase demand and reach a price point that more people can afford and get financed. Atwater Place in South Waterfront held a condo auction last fall and the John Ross is scheduled to auction 50 units on April 11th. While this may temporarily decrease the values of neighboring units, ultimately this will decrease supply in the market and accelerate the emerging urban area. To help protect your investment, check to be sure that the existing percentage of rentals in a condo building is not more than 30%. Many advisers predict the current supply will only meet the demand until mid-2012. Economists are saying that we have hit bottom, prices are flat, and recovery will be slow until possibly mid-2012. For lack of a crystal ball, it seems like a good time to take advantage of the current incentives and reduced pricing to find a place you love before supply lowers, rates increase, and demand heats up again.