Are Condo Conversions Losing Steam?

The Condo-conversion Craze took over the Las Vegas real estate market and thousands of rental apartments were converted or set aside for conversion to condos. These condos were either sold back to the renters of the apartments or to other homebuyers. The condo conversions became the new entry-level for buying a home.

If you could come up with the initial down payments then for the same amount you paid as rent or slightly more you could become the owner of your apartment. This was an attractive option of for thousands of Las Vegas residents who could not hope to own a home otherwise.

As median prices of single family homes was $300,000 and other housing options also showed an upward trend, Condo conversions could be bought for as low $90,000s a year ago and are now averaging about $168,000. Monthly sales have of these condos ranged from 500 to 600 units.

Apartment units slated for condo conversions are selling at a 55 percent premium compared with traditional apartment units. The median price nationally per unit among conversion sales is $124,500 for 2005, only marginally higher compared to 2004. The prices are expected to remain relatively flat or post only minimal growth as the housing market cools over the next 12 months and costs associated with conversion goes up.