Tuesday, March 28, 2006

Who Needs a House? Modest(o) Condos Have Granite Countertops!

The Modesto Bee and the Sacramento Bee report on the Central Valley condo craze.

From the Modesto Bee:

The owners of four large Modesto apartment complexes began selling their 361 units as condominiums last year. Now the owners of another 327 Modesto rental units in four more complexes are considering converting them to owneroccupied condos...Last year, Modesto converted more than 5 percent of its rental units into individually owned condos. That was more than double the conversion rate for the nation and California, according RealFacts...

Before putting former rental units up for sale as condos, the conversion companies usually do extensive makeovers. The units typically get new flooring, paint, granite countertops and kitchen appliances. The roof, plumbing, electrical, heating and air conditioning systems often are upgraded, as well. The condos converted last year sold well, but many of them remain on the market.
From the Sacramento Bee:
Only three years ago new condominiums and apartments converted to condos were a bare 2.2 percent of new-housing sales in the six-county Sacramento region - El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties. Last year they reached 18 percent, according to Costa Mesa-based housing analyst Hanley Wood Market Intelligence. Long a second-class housing option in a spacious, once-inexpensive region that loves its traditional single-family home, condominiums reflect the capital area's harsh reality of skyrocketing land prices and homes beyond the reach of many buyers...

Newport Beach-based John Laing Homes spotted the trend nearly six years ago and started building condominiums three years ago, said Mark Levens, vice president for Northern California sales and marketing. "You look for voids in the market," he said. "Now everybody is running into that void in the market..."

The rush to condominiums, especially in suburban areas such as Natomas, West Sacramento, Elk Grove and Folsom, increasingly shows an inland metro area coming to resemble larger California cities and similar-sized urban areas nationally, say those familiar with Sacramento's growth.

"What's been going on in San Diego is going on in Sacramento," said Steve Bolli, sales director for Reno-based Pacific West Companies, building condo projects in Elk Grove, West Sacramento and Folsom. Bolli said condominiums, long unfavored in Sacramento for fear of smaller spaces, noisy upstairs neighbors or perceived poor prospects for appreciation, are increasingly popular with Sacramento-area cities that want to see more people on less land and provide residents more affordable options.
Comparing the Sacramento condo market to San Diego may not be such a good idea, considering the troubles now occurring in San Diego and elsewhere.

The Sacramento Bee also has an article on the "commercial condo" movement.

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