Unfinished condos

This photo shows an unfinished condo project on which there is no sign of continuing construction. Some buildings are nearly complete, but empty. Others are an unpainted shell, without roof tiles. The swimming pool is empty. The deck is a steel frame, but no deck. A very few units are completed and occupied.

This is a sad scene. It reflects a developer who has probably run out of money and, more important, purchasers who have paid money and have not realized the enjoyment and benefits that they expected.

During the boom years of 2000 - 2007, many new condo projects were sold, and it was common for the purchase price to be paid 1/3rd down, 1/3rd when the roof was installed, and 1/3rd at closing. This means that some people have paid a substantial amount of money and it is uncertain when, or whether, they will receive delivery of a new condo.

Developers were building projects with financing from buyers, but if the projects did not sell out or if the buyers did not make their second payments when the market collapsed, some developers ran out of money to finish the projects. Julie and I bought both of our condos in projects developed by the owner of the Tamarindo Diria Resort, the largest hotel in the area. We figured that he would have the resources to finish the projects, and he did. Both projects are successful.

People like to say that real estate is a matter of "location, location, location," but it is also a matter of "timing, timing, timing." The difference between some successful projects and projects such as the one shown today in some cases is that the failed projects hit the market at the wrong time.

This week we are showing photos of Iceland on our Viva la Voyage travel photo site.