Three major condo projects, 44 Monroe in downtown Phoenix, 3rd Avenue Palms in Phoenix and Safari Drive Scottsdale, all went in to foreclosure in 2007 when the builders could not sell at the obnoxiously high prices they listed.
After the developer, Corus Bankshares Inc., lost the properties and went bankrupt, a Chicago firm, ST Residential, was created to move the properties again.
Check out the AZ Republic notice here.
This is an interesting development because the condo market is in such disarray right now. Long story short, almost every condominium project in the country last year was “de-certified.” Certification is required if you want to buy a condo property with an FHA loan. Since the vast majority of buyers right now are FHA buyers, the condo market is in trouble.
This is why I have been able to help people find incredible condos for less than $100,000. Some even lower, like the 2br/1.75ba place around the corner from me for $40,000.
But, how do they recover? Well, these three developments will certainly get FHA certification. So, you would be able to buy there. But even with FHA certification, there are only a certain number that are allowed to go FHA. For instance, the Pierre of 5th condominiums were certified when they came back from foreclosure. But they can only do conventional at this point because they sold the maximum allowed to go FHA.
I don’t know what the limit is on these new properties, but it is easy enough to find out.
Still, given all of that, I think the prices for 44 Monroe and Safari will be a little too high for most and they will have to come down. I think that 3rd Avenue Palms is pretty well priced, starting at $80,000 (undoubtedly for a 1br/1ba). However, I can’t imagine that Safari Drive, starting at $249,500, will do a brisk business for a while –even for Scottsdale.
In other words, I don’t see other condos or residential homes coming down any further (we have been skipping along the bottom of the market for a while), but at least two of these particular projects will probably have to come down or sit empty for a while longer.
…Just a little prediction. File it appropriately.