I know a lot of Downtowners read this blog, and some of you are consider buying a condo in the next few years. Check out this article on MSN Money – it will give you some things to consider when deciding if a condo is a good investment.
My take on it: The downtown Memphis condo boom will continue as long as interest rates stay low. But, Greenspan has warned that the deficit situation, combined with baby boomers starting to retire, is bound to push interest rates up. When that happens, the downtown condo market will begin to look overbuilt, and core downtown – where parking isn’t included in the purchase of a condo – will be hardest hit.
I also think core downtown condo property values will take a hit if we continue to have earthquakes of any size (magnitude 4 or greater) in the region. CERI has said over and over again that the older buildings downtown will not be able to withstand a major earthquake, and if it keeps coming up in the news people will get skittish and be afraid to buy.
I think there will be a right time to buy downtown – but it’s somewhere between 3 and 10 years from now, after the condo bubble bursts. Until then I’ll keep renting.