According to an article in the Star-Telegram, Dallas-Fort Worth has one of the worst oversupply of condos in the country. Dallas alone has a five-year supply of million-dollar condo units sitting empty. The high priced condos account for 1 out of every 4 condos in foreclosure The glut of condos have been hurting prices and forcing many condo owners into foreclosure because they simply can't sell their units for anywhere near what they would need to cover their mortgage. But this glut of condos threatening to further inflate the not stop the foreclosure crisis shouldn't be a surprise to the housing industry, even the Federal reserve was worried about over building a few years ago.
The article said:
"There is growing concern about overbuilding of condominiums and townhomes in Dallas, and contacts fear that it will end badly," the bank wrote in the June 2006 Beige Book.
And ending badly is exactly what's happening as the numbers of high priced condos continue to sit empty and entire complexes succumb to foreclosure and/or bankruptcy. Although the credit and foreclosure crisis has slowed the building of condos, construction has not stopped. With an oversupply of condos already on the market we could see prices declining further and more condo owners succumbing to foreclosure as they are unable to sell their units.