Condo Conversion Flops

From News10 (video here):

Owners who bought "luxury" condo conversions at the peak of the market now complain their complexes still feel like apartments.

At Somerfield in Elk Grove, the developer boasts of a resort-style community. But just a year ago Somerfield was an apartment complex. Signs and banners in front of the complex advertise "luxury" condominiums for sale from $190,000. But ads in housing rental publications offer the same units as apartments from $925 per month. Property records show just 13 of the 280 units at Somerfield have been sold since sales began last December.

A retired painter from Southern California was the eighth owner to buy at Somerfield and told News10 the sales staff was upfront about the difficult housing market. "They explained they're trying very hard to sell but they still need revenue, so they're still renting them out," said Bill Bearss.

But owners at another former apartment complex converted by the same developer are not so understanding. "They were hoping to have this place fill up within about four months," said Jim Colvin, who was among the first to buy at Rollingwood in Fair Oaks in October 2005.
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Apparently anticipating strong sales, Pismo Beach developer Al Nevis moved tenants out of the former apartment complex during the conversion. Now more than half of the 272 units are vacant....
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Some condo owners at Rollingwood said they would reluctantly welcome tenants in the vacant units to raise money for the homeowners association. But owner Jim Colvin doesn't agree. "Then it becomes a rental property again," said Colvin. "And our value is gone."

'There Goes the Property Value'

George Warren reports for News10 (video here):

More than 100 units in a Sacramento-area condominium complex are headed into foreclosure in what appears to be a case of bad timing. A development group called Rollingwood North LLC purchased the former Rollingwood Commons apartment complex in Fair Oaks and Orangevale in 2004 when the housing market was near an all-time high.

The company began converting the 242 units to "luxury" condominiums. According to county records, sales started strong in late 2005 with 76 units sold in the final three months. But sales tapered off in 2006 and in the first three months of 2007 the group sold just one unit.
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Rollingwood North apparently stopped paying dues to the homeowners association, which has begun foreclosure proceedings...[T]he collection agency handling the foreclosures told News10 it is still filing the paperwork and the total will be 188 units in default.
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"There goes the property value," said Sharon Morton, who paid $239,000 for her two-bedroom condo last fall.