So, let me start by saying that almost every article I write for my newsletter or blog will have a link to an external published piece or website that supports my message. This one does not, as it is not only my own opinion, but, seemingly (because, yes, I DID google it to no avail), too location-specific to have been written about. So that means that my opinion cannot necessarily be corroborated with available data. Now that I’ve provided my disclaimer, here’s what I think: Most of the established condos in Lower Merion are declining in value and it’s due, in large part, to the exceptionally high condo fees. Many of these buildings are older and need fairly extensive renovation or just a lot of routine maintenance. The monthly fees are often more than the mortgages on some of the units and special assessments are becoming common. While many of the services offered (valet parking, help with groceries, complementary shuttle service to the supermarkets) are directed mainly at the more mature populations who tend to choose this lifestyle, those retirees are often on a fixed income which doesn’t mesh well with astronomical monthly condo fees. Their only option sometimes is to sell. A second factor which has resulted in yet more units being marketed for sale is that some of the buildings, due to negative experiences, have lowered the cap (or altogether removed the option) on the number of units that can be rented out by their owners. The upshot: no new investors are buying any of the available units, further reducing the potential pool of buyers. These buildings end up with several units for sale and very few sales. So sellers drop their prices and even then, sales don’t happen quickly. Taking the entire picture into account, these factors combine to create a drop in values which does not appear to be abating. Sad (for sellers), but true.
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