Sunday, October 11, 2009

On your mark... get set... RESET!!!

We all saw this coming. The Atlanta condo inventory that no one seems to talk about, like the Midtown projects The Atlantic and Luxe. Huge monoliths of eerie silence that stretch to the Atlanta sky. But now the cat is out of the bag. Corus Bank's failure is going to reshape the already trimmed landscape of the Atlanta condo market. They had about 2,000 condo units being financed during the construction phase... with about 80% that remain unsold. Scary. So... the FDIC stepped in and auctioned the loan portfolio, with Starwood Capital Group being the winning bid. The resolutions to these loans (aka. price cuts) is predicted to cause a sort of knee-jerk reaction, as other banks start to pull the foreclosure trigger on projects in those market spaces. My friend Uri Vaknin was quoted in the Atlanta Business Chronicle when asked about the cut in condo prices that is to come - - "This is going to reset the market, but I think this is a really positive thing for the Atlanta market."

My advice? If you are thinking of selling in order to take advantage of a "move-up" opportunity to get a bigger place while prices are low, you could end up disappointed if you wait to sell your existing condo -- thinking the market will return next year. You can't sell high and buy low in this market. Take a smaller loss now and buy bigger for less... and you will come out ahead in the long run.

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