For the better part of 18 months, the housing market has been suffering through a conundrum that few understand completely and even fewer have an answer for.
Many entry level condominium Sellers have their respective properties on the market and the Buyers have been observing but not doing much with the inventory, save checking on it periodically to see what the prices are doing. Some even writing offers and being turned down by the lenders.
In the lower scale of pricing, many of the available properties are marketed as short sales and REO ( Bank Owned) properties. There are ready buyers for many of these properties but the market circumstances and lender requirements have created road blocks to their being purchased.
Many sellers with few other options, have opted to rent out the properties instead of facing the lower values or the other possibilities of short sales or forclosures. This has knocked down the percentage of owner occupied properties and many of the condominium subdivisions no longer fit with the lenders requirement for conforming loans of 60% owner occupied to qualify for 10% down payments. With that owner occupied qualifier, Buyers need to put down a minimum of 20%. At the entry level most Buyers don't have 20% to put down. So the shortage of qualified subdivisions has actually limited the qualified inventory for new 1st time Buyers. As time passes and more and more property owners find themselves upside down, this quagmire only worsens.
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