The Florida Condo Market

In 2006 when sales of Condos were still occurring, a $150,000 ten-year interest only mortgage was posted at 7.5% with the 10-Year yield at 5.25%. Recent sales of the type of condo were around $425,000 with property taxes around $5,600. You could also get a Line of Credit of $150,000 at about the same interest rate.

 

Early in 2008 when the 10-Year was 3.25% a refinancing of this type of mortgage could not be done. The posted rate was 8.5%. The assessed value was down to $329,400. The Line of Credit was still $150,000 at 7.5%.

 

Today the assessed value is $263,500 down 38% from that 2006 sale. The property tax is down just 17.4%. The stupid thing is that the bank lowered the rate on the $150,000 line of Credit to 5.25%.

 

I don’t get it?