by Calculated Risk on 7/12/2010 11:30:00 PM

Another update on condos as shadow inventory ...

From Kelly Bennett at the Voice of San Diego: Vantage Pointe's Trouble Persists, but Downtown Thinks It's Found Bottom

Weighing in at 679 units, downtown's biggest condo building, Vantage Pointe, has met with outsize trouble since 2004 when buyers first got in fistfights for the privilege of securing a unit.

The building's trouble continues. The developers haven't sold a single unit in the 14 months since returning deposits to the previous contracted buyers. About 40 buyers have signed contracts to buy there but can't close the deals. More than 150 other units are being rented.

But that's not enough to satisfy the project's lenders behind its $210 million loan, the largest construction loan on a single residential building in San Diego history. Those lenders filed a notice of default in April, pushing the developers to the first stage of foreclosure.

This is another reminder that unless these condos are listed, they do not show up as either existing or new home inventory (the new home report doesn't include high rise condos).

And 150 of these units have been rented and will probably be sold someday too. I spoke to a landlord in the downtown San Diego area yesterday, and she has had to cut rents significantly to compete with all the condo units being rented.

There are some areas - like Las Vegas and Miami - that have a huge number of vacant high rise condos. But there are also many smaller buildings that are mostly vacant in a number of cities (like in New York, Chicago, Raliegh, N.C. and Irvine, Ca). This is all part of the shadow inventory ...