J.B. from outside of Connecticut writes:
Dear Mister Condo,
Our condo dropped significantly in value just like every other condo community around us when the economy collapsed in 2008. In the meantime, our HOA began a litigation against the builder. This meant that when prices of other communities began to rebound a few years ago, ours remained low because mortgages were generally unavailable to purchasers and it has been all cash sales. All other condo communities surrounding us have now rebounded to pre-recession value, but our community has remained low in price due to the litigation. We just received notice that all parties have settled and the court ruling will be within the next couple weeks. We would like to sell our condo and are wondering how long it will take to see our condo value rebound now that the litigation has ended. Can we start using other similar communities as real estate “comps”? Thank you!
Mister Condo replies:
J.B., I am sorry your condo association was forced into litigation against a developer. Lawsuits can have long-lasting repercussions against associations including the financial burden of funding the suit when monies could be used elsewhere or put in Reserve, creating a strong financial position for the condo, which is desirable to an educated purchaser. That being said, if your condos look as nice as others in your market, there is no reason to think the units shouldn’t rebound now that mortgages are available. Price is driven by market demand. An encumbrance like a lawsuit can hinder demand but with the suit out of the way, I can’t think of any reason the prices shouldn’t rebound quickly. Make sure the unit is in good shape and that the association is doing all it can to keep the curb appeal in good order. The right realtor will market the unit properly and the market will dictate the price. Good luck!