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Residential Department: From the Top: July 2007


From the Top

On a recent episode of HBO’s “Entourage,” character Johnny “Drama” Chase celebrates his recent success by checking out a two-bedroom Beverly Hills view condominium and balking at the asking price — $1.4 million.

Our first thought? That’s cheap. After all, the median price for homes in the 90210 ZIP code was about $1.6 million in 2005, when it ranked as the 22nd-most-expensive ZIP in the nation.

The second thing to come to mind: Even fictional cable characters are onto the recent condo crunch.

Sales are down. Buyers are dropping out. Conversions have disintegrated. Developers, faced with a growing unit inventory, have shown desperation — tagging on selling perks that range from high-definition televisions to dog toilets.

In the bigger picture, however, brokers still might find themselves in a position to blow back the bubbles that have popped up in numerous regional condo markets. The secret is in identifying them.

NIGMA Capital Finance’s Carlos F. Crespo tackles this issue in this month’s Lead Article (Page 18), noting that bubbles — be they in Beverly Hills or Beverly, Kan. — and the “irrational-exuberance land” they rode in on actually can provide opportunities for savvy brokers.

Meanwhile, others point to the basic logistics of condo living as potential reasons why condo drama could very well be containable. After all, for all the potential homebuyers who turned to renting as housing prices jumped, there are others who downsized — perhaps shelving the idea of an $800,000 house for a more affordable condo. Buoyed by talk of vertical growth and density, numerous U.S. cities also continue to see scads of new condo units hit the market, even as inventories grow.

Because hey, someone’s got to live in them. Right?


Geary Britton-Simmons For questions on this article, call (800) 297-6061 or e-mail

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