Moving on to the condo market, the WSJ reports that some adventurous folk are snapping up condos in bulk at reduced prices in some of the hardest hit markets, like Florida. Florida, if you'll recall is merely one of the places where condo developers went a little cuckoo with the building and decided it was a great idea to build around 300 years of luxury inventory. Some of those folks have gone bankrupt, while others are just puking units to stay in business. In any event, buyers are scooping up boatloads (cause its Florida) of condos at "fire sale" prices and hope to sell them for higher prices. The classic quote comes courtesy of a property broker that is currently marketing units: "Bulk sales in general can depreciate value of an asset and it does trickle down and affect other properties." Right. Cause it's the bulk sale that "depreciates" the asset, and not the fact that there are like 5,000 similar units on the market at prices where nothing is selling. Buyers who had the misfortune of purchasing before the market collapsed are torn between hating the fact that the value of their condo has just officially been cut in half and liking the fact that somebody actually bought all the units that were for sale in the building.
Meanwhile, builders such as Toll Brothers, whose overpriced units on a Singer Island development don't look so hot compared to the prices of a bulk sale that just took place in a competing property offer up these optimistic words of wisdom: "Anything that gets the inventory down is a good thing." True enough. But if the bulk buyer just plans to turn around and flip the properties for a higher price (which is true in most cases,) how exactly does that solve the inventory problem?