I've been trying to ride my bike more and more lately, exploring all the various side streets of downtown, delaney park, colonial town, etc. If there is one thing thats consistent, it's all the "for sale" signs. I own a 1br condo up in DC that we're exploring our options on. The place rents out well since it's located in a really trendy neighborhood and in a great building. As you'd expect though, DC sales are fairly soft right now. When I bought, I researched the market considerably before making the move. I knew that we were obviously in a boom, but wanted to go past that and understand historic trends in the area. The information I've learned from buying, and now leasing (and maybe soon selling) is largely what I know about Real Estate.
Here in Orlando, the factors seem to be much different. In DC, space is at a premium and houses start at 500k and up. Orlando appears to be the opposite. We're a sprawling region with affordable housing (people may argue that, but compared to a lot of other places, its affordable). Condos up in the District (and really, any 'big' city) sell well because people can't afford houses (at least, in the neighborhoods they like). Of course there are anomalies (pimped out $1m condos, people into the 'lifestyle' thing), but ask most folks and they'll tell you they'd rather be in a brickstone. Here, great houses seem to be similarly priced and sometimes cheaper than condos in the same neighborhood. That blows my mind.
For example, there is a condo listed on MLS at the Vue (new building on Lake Eola) for about $440/sq ft. I believe it's two bedrooms, 389k or somewhere around there. Down the street from me (same area, Lake Eola Heights), there is a four bedroom house on a decent lot for sale by owner, for less than the condo at the Vue.
Hopefully, it's obvious why this strikes me as surprising. First, DC condo prices are between $400-$600sq/ft in most "desirable" neighborhoods (Georgetown, at the height, topped $1000sq/ft). Why the heck would Orlando condos rival DC's in price? Second, is that there are 4 or 5 new condo buildings going up downtown and plenty of units available in the 3 or 4 buildings that were recently built. There is ample supply, a high percentage of investors and tons more space to build new units when they are needed. Yet, somehow, they are more expensive then a house on decent land located downtown.
I can't possibly claim to be an economist or a real estate developer, but something just doesn't add up.. I've been tracking prices at the Waverly and watching them fall since I moved back in December. The only comparison I can find might be Miami during the 80s -- condo prices were cut in half by the end of the boom. That seems a bit drastic, but would it be possible to see 30-40% price reductions?
Any thoughts?
