Feldman cites the continued strong investor interest in residential properties, along with the commercial and industrial sector.
"Nearly half of all apartment building sales are condominium conversions," he noted. "This has created a whole new class of real estate ownership. Given the tremendous segmentation of real estate assets, having so many more potential buyers and sellers, we have unprecedented liquidity in the market. And the huge level of capital seeking real estate investments contributes to that liquidity."
Feldman also pointed to the growing number of Americans with multiple residences. "It wasn't long ago that second homes were a rare luxury for the rich. Today, many working professionals and early retirees have purchased additional residences for weekend getaways and, in many cases, simply for investment purposes. That includes fractional ownership in resort communities.
"It's not at all uncommon for your neighbor in the suburbs to own a ski condo in Colorado or a second home at a lakeside or on the coast," he said.
Feldman acknowledges the creeping prospect of a "market drop," particularly in view of recent signs of growing inflation. The Federal Reserve's inclination to continue boosting interest rates will have an impact. Some economists now predict oil prices may surpass $100 per barrel, and that would curtail investor interest on a number of levels, from being able to travel freely to an owner's second home to maintaining mortgage service and cost of heating expenses, he said.
Feldman is managing partner of the Century City (Los Angeles) office of Pillsbury Winthrop Shaw Pittman.
Q: Are residential condos becoming more popular?
A: Residential condominiums are a hot product nationwide with growing sales. They typically don't receive as much attention as detached homes, but their recent sales activity is just as much or more impressive, particularly during the past year.
"The condo market segment appeals more to a slightly different customer base compared with the detached home market, with single-person households accounting for 44 percent of all condo buyers, compared with 24 percent of all detached home buyers," said Jim Hamilton, president of the California Association of Realtors.
"While married households account for 64 percent of all detached home purchases, they account for just 42 percent of all condo purchases. Condos are especially appealing to first-time home buyers, who comprise 37 percent of all condo buyers last year. That compares to 26 percent of all detached home buyers.
"Condos are also very popular as vacation or second homes. That accounts for 9 percent of all condo sales."
Send inquiries to James M. Woodard, Copley News Service, P.O. Box 120190, San Diego, CA 92112-0190. Questions may be used in future columns; personal responses should not be expected.
