However, to a lesser degree, we may have some “growing pains.”From Saturday’s Wall Street Journal (temp free link):For the nation’s real-estate lenders, the other shoe may be about to drop: condominiums.Already plagued by rising home-loan defaults and foreclosures among overstretched consumers, major markets across the country — including parts of Florida, California and Washington, D.C. — are seeing rising foreclosures and bankruptcies of entire condo projects….The condo market, while tied to the housing market overall, behaves differently under stress….  So while the speculative overhang of newly constructed single-family homes may have peaked in many markets across the country, the full force of the condo glut is starting to hit now.With single-family homes, “you put up a couple of model homes and build the rest as you get sales contracts.”…  (when was it registered with the Commonwealth?)- How many of the sold units have been sold to owner-occupants?To give a very high-level (and admittedly somewhat inaccurate due to GIGO) overview of the Charlottesville condo market, here are the results of a quick MLS search with no status attached:Condos in Charlottesville/Albemarle marked as new construction: 313Not marked as new construction: 3,333Conclusion – there have been far fewer new condo developments built than have been converted to condos….  we have the mostly unrelated condo conversion issue, which was nothing more than an arb of the overheated housing market vs. relatively low rents.But too many of these “conversions” were nothing more $1000 of new paint and countertops slapped into formerly rental units and that was supposed to support valuations 20, 30 even 50% over the income property valuation (even at today’s crazy cap rates).

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