Condo Conversion Incursion

1,600 apartments are being converted into condominiums in Broward and Palm Beach counties, with a real estate value over $240 million. McCabe Research and Consulting President Jack McCabe attributes the popularity of condo conversions to low interest rates and investors looking to engage in what he calls "rental carryover situations," though he expects a slowdown in both conversions and unit price-appreciation by the end of the year.

According to McCabe, "The future numbers won't work for the small investor at today's locked-in rental rates and developers will be wary of the bidding wars for the few good properties left for conversion." Condo conversions in 2004 led to an 8.4 percent decline in the number of rental units in the region, and McCabe expects that number to increase this year.

Posted by Donald Urschalitz P.A. at July 27, 2005 06:09 PM