An interesting article in today's WaPo.
A growing number of condominium developers are backing out of projects as the worsening real estate market causes lenders to tighten their standards.
For buyers, a project's cancellation can be an unexpected jolt. They get their deposits back but nothing for their time and aggravation.
In the past 12 months, nearly 20,000 condo units have been removed from the glutted local development pipeline, said Gregory H. Leisch, chief executive of Delta Associates, a real estate research firm in Alexandria. By Delta's count, in the second quarter of this year, developers abandoned plans for 22 local condo projects.
The market's correcting itself and some unfortunate buyers are getting caught up.
And projects are being canceled.
The list of abandoned condo projects is growing.
Level 2 Development of the District decided late last year to build View 14 at 14th Street and Florida Avenue NW as luxury rentals instead of condos. "It was clear to us from the sales pace and activity that we were going to have a difficult time preselling the number of units required to meet both the lenders' presale requirements and our own investment criteria," said Jeff Blum, a principal at Level 2.
Earlier this year, the Joule in Arlington, developed by Ed Peete, also went from condos to rentals. In Leesburg, Comstock Homebuilding went so far as to repurchase 58 of the 316 condominium units at the Bellemeade for $12.8 million before selling the building to a Midwestern apartment operator in June.