In my recent internet readings I stumbled upon an article that expressly stated the housing market was starting to finally dip. Then there was the obligatory exception---the Pacific Northwest, and more specifically, Portland and Seattle. As one who lives here, I could not be less surprised.
If anyone has the real answer to the purpose of the condo conversion I would like to know. Just yesterday, I noticed a great little older building being renovated and instantly started dreaming of moving: It's a smidge closer to work, to friends, all the usual things. Then I realized it is a condo conversion. In my neighborhood, I can think of at least 5 major buildings which have gone condo in the past year, including a rather unattractive complex right across the street.
What is to be done with all those displaced renters? These are people like me who can barely afford Portland's inflated prices. For example, my friend just got a place in a condo conversion which is only about 450 sq ft and that set him back $200,000. A fair price for this neighborhood when the average condo is going for closer to 5. (Of course those are much, MUCH larger as well.)
Here is the conundrum. I understand the owner's right to do whatever he wants with his building. I'm certainly for enforcing those rights, but I can't help but think people who can't afford to buy, nor rent something in the Pearl for thousands a month, yet who don't qualify for section 8, are the only ones getting screwed in this city. The condo conversion is only creating a self-defeating environment for renters. Namely, more condo conversions = less places to rent = higher rental prices = driving out the lower middle class. Sigh.
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2 comments:
Heh. It's part of the nation's war on the middle class. It begs the question that if a nation's future lies in its middle class and not in its Bourgeoisie or lower class (one signifying "old money" and the other "no money") then why are we doing everything in our power to stamp out our own middle class? It's great for politicization by the Democrats who are help making it possible: when they say the class divide is growing they are right.
As for residence prices there..... Jesus. My dad's entire home with 2 acres of land was $200,000 and you can only get a condo with that?!
And as for renters being self-defeating, sure they are. The whole economy goes in cycles like that, the real estate industry included. (Corn vs. Agave in Mexico?) Eventually they will have to reduce the price when it comes to the point that they can no longer attract tenants, just like supply and demand in other industries.
Condos are more attractive to potential investors and developers: they get a bunch of money at the onset of the project in the form of downpayments. In addition, buyers are more motivated and attractive tenants than renters. Having a rental building means facing the possibility of wasted potential earnings should you be unable to fill all the apartments at one time or another.
Markets and such are cyclical. As the demand for affordable rental property increase more and more, some enterprising developer will see the high demand and low supply as an fertile business opportunity. In addition, the high prices and lack of available options will likely work to eventually cool demand.
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