Friday, August 17, 2012

Real Estate Condos: Beware

condominium
condominium (Photo credit: OiMax)

Canaries were often used by miners to detect dangerous gases because, being so small, the gases would overcome them quickly enough for alert miners to get out before they themselves were overcome. So it is with savvy real estate market watchers and condominiums.

Condos are typically the first units affected in a real estate market because there is so much speculative activity - from both buyers and sellers - that they tend to move in larger swings and more quickly than the overall market. Takes a look at condos in representative markets across the nation to find if all is well or not. It is quite difficult as markets are widely different from one another. For example, real estate in Syracuse continues to do quite well. However, neighboring areas struggle, making the area as a whole struggle.

Keeping in mind that most of the people interviewed are the professional optimists, the underlying theme here is that speculators are getting scared out of the market and sellers in some markets are taking losses on recently purchased properties. Sure it can be difficult to gauge an entire real estate market, but in hindsight, these would be the telling signs of a major collapse.

Be a smart miner and heed the warning signs.