subject: How The San Antonio Condo Market Is Changing To Reflect Todays Economic Challenges [print this page] Strict lending practices for multi-family dwellings have caused the already-struggling San Antonio condo market to make some serious changes in order to stay afloat.
The downturn in the national housing market is the first hurdle to jump. Add to that the fact that many lenders just arent willing to provide financing for condos, and it becomes increasingly clear that the San Antonio is in for a bumpy ride.
From Condos to Apartments
One of the most obvious changes to San Antonio condos is that many builders and developers are changing their properties into rentals. Many of the new condominium projects have turned to apartment rentals, while others are simply crossing their fingers and hoping the condo market will soon improve.
Tighter Lending Standards
San Antonio condo developers that have chosen to keep their properties instead of renting them out are finding that they must consider all of their options because of todays tough lending standards.
This seemed to be the sentiment at the Downtown Alliance of San Antonios State of Downtown Luncheon that was held recently as the Hyatt Regency. Centro Properties President Debra Maltz further confirmed what everyone was already thinking: that purchasing San Antonio condos in todays market can be downright difficult.
In particular, builders are faced with new lending standards that require 70 percent of a propertys units to be sold before they can obtain financing for a new project. Because of this, many condo developers in San Antonio have abandoned condo sales in exchange for leasing apartment units.
A prime example of this is St. Benedicts on South Alamo Street. The developers of this project have switched gears from a condo building to leasable apartment units. The proposed Clay Street Flats and the Steel House Lofts have also followed suit. The Clay Street Flats project is currently on hold until the developer can secure financing.
The Challenges of Securing Financing in a Tough Market
Even those home buyers with excellent credit and a solid 20 percent down are finding it nearly impossible to secure financing in a new condominium project. Many of the condo loans are considered jumbo loans, as well, thereby requiring a much higher down payment.
However, some developers are finding ways to squeeze past the tight lending standards and secure financing for their buyers through private bankers. Private bankers, either through the developer or the buyer, are common in many luxury condo developments, thereby enabling home buyers to avoid the hassle of securing financing through a bank lender.
Perhaps the only exception to the rule is downtown San Antonio condos. The demand for downtown San Antonio condos remains strong, thereby keeping this sector of the condo market healthy. The newly constructed Vistana, for example, is currently more than 70 percent leased.
The challenges in the residential market have a ripple effect on other markets, particularly on the retail market. Because of this, changes must be made to the struggling condo market of San Antonio so that growth in San Antonio can remain strong and the economy can remain dynamic.
