As we continue to hear positive analysis in the home secter, I want to mention something that many people do not understand, and it is very simple to explain.  In Cape Coral, Ft. Myers, Naples, Bonita Springs condo markets, buyers are having terrible luck finding banks that will finance them.  Why?  It’s crazy that the bank disqualifies the loan moreso due to the Homeowners Association rather than the borrowers credentials.

Due to the glut in condos for sale on the market, more and more buildings are exposed to defaulting mortgages.  With defaulting mortgages comes lack of dues payments to the HOA.  So the question the banks ask is “what kind of stability the HOA has.”  Banks will assume that the HOA is unhealthy, therefore will not risk carrying a mortgage when they do not know what is going on with the HOA.

That said, look for a steeper drop in values in condos for sale in Southwest Florida.  The reason is that the more and more adversity there is in condo financing, the lower than amount of owners that can refinance and which also lessens the amount of people qualifying for new purchases.   It may be wise to hold off for now, or at best, look for a lease to purchase option.  If you are looking for a purchase, try looking into single family homes.  The median price on homes is about 30% cheaper today than the median price on condos in the same area.  So you have to pay a landscaping company $100 per month to manicure your lawn, $75 in property insurance, and pay a pool guy $45 a month to clean your pool.  Still beats the expensive rates of an HOA.

The bottom line here is that we feel that condo values are coming down still.  It is very nichey.  Single family home sales are picking up and a true market analysis must find balance between SFR’s and condos.

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