Condo market slowing down, New York Times tells us

in "Buyers Scarce, Many Condos Are for Rent." That the housing market is slowing down isn't news. For example, in the H Street neighborhood, Senate Square is moving forward (Old Children's Museum and new construction). It seems as if the 300 block project is still on board. And the developers on the 600 block are moving forward, partly because some buildings are still going to be leased as office, and apartments are a possibility. Other projects are stalling.

The number of condo projects on the books is pretty high. The places that are the best located and not stratospherically priced will be attractive to people who actually want to live there. Places expensive and less well located will not be as attractive. Investors will not participate as much in the market, which means that prices won't continually be pushed higher as a result of forces outside of the market of residential buyers. Plus, this will delay projects. I guess that banks don't like to release funds until the projects are 50% sold. So this will scrap condo projects, or lead to their conversion.

The wild card will continue to be units purchased as second or third homes by people with their primary residence outside of the region. Have you ever looked up at a downtown condo building in the evening and seen very few lights on? Second and third home buyers have the effect of pushing up demand in ways that are counter productive compared to people looking for a place not just to buy, but to inhabit.

Yes, some projects will go forward, but as rental. Other projects will be delayed, especially those located outside of downtown, the eastern end, and the 14th and U Street corridors. And eventually, the market will pick back up.

See "The Cairo: Tower of Style And Elegance," from the Washington Post in 1996, 10 years ago. Then units cost about $120,000.

This Craigslist ad from last week seeks to sell a Cairo unit for $250,000.

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