Rule to remember: Whatever the situation, whatever the market, buyer’s or seller’s, it doesn’t matter, there is always someone who hurts and someone who benefits. I say this because if you are in a position to buy something now, you are in a truly great place. Real estate in downtown Cleveland is full of great opportunities but for the purpose of this post, lets focus on condos.
Because of the many banks who got burned on loan defaults and because of the added risk a loan on a condo poses in their eyes, FHA, for the most part is out of the question when trying to finance a condo. That means that in many cases you can’t buy a condo with less than 20% down. Bad news for many condo sellers, great news for buyers who have the funds and are looking for leverage. Add to this the alarming inventory the historic low interest rates and the already thin competition for the good buys and you suddenly find yourself in a great situation to find the best deal for the best price. Should you be afraid of making such a big investment when things look so bleak? Of course not! That is exactly when smart money steps in and makes a big investment.
Here are the facts. Cleveland condo construction only really got pumping a few years ago and the city is far from being over built like a Vegas or parts of Florida. The chances many more Highrises will be build in the forseable future is slim to none. Financing will eventually loosen up and the market will eventually turn. Add to this that rental vacancies are at an all time low and suddenly the opportunity for an investment starts to look a lot more attractive.
When I list a condo for rent it doesn’t last, especially a luxury condo. Picture buying a luxury condo that you know is in high demand as a rental. This condo is tax abated and the interest rate on it is at around 4%. You do the math and tell me thats not a great opportunity for investment.