Last night there was a reception in my building for another building nearby that is being converted to condos. The units in the building will sell for $300,000-$600,000.
This reminds me of checking Yahoo’s stock price in 2000, seeing it at $250, and thinking, “I’ve got to invest in these Internet stocks! I’m buying!” Yahoo is a great company with fantastic management… ain’t no doubt about that. And one day, it will see $250 again, and higher. But that day is a while coming. (In case you’re curious… Yahoo closed at $41.75 today)
Same with this new building, and all the other new condos downtown (I see it’s the cover story of this week’s Memphis Flyer; haven’t read it yet). No doubt that these are some quality units they’re building/converting, and will be beautiful places to live. And if that’s where you want to be and you’re in for the long haul, go for it. But if you think you’re going to turn a profit in a few years on your investment, you’re out of your mind.
The condo bubble is about to burst.