Let's start with the bad news.
As community associations across the country continue to deal with the consequences of a struggling economy, the Community Associations Institute (CAI) conducted a survey of approximately 600 associations. Nearly half of those cited that their associations are dealing with "serious" problems as a result of the downturn, while 10% stated that the impact felt by their association was "severe."
Among the problems cited were:
- High vacancy rates: Nearly a quarter of respondents reported vacancy rates of 5% or more, and 30% reported vacant units making up 3-5% of their associations. They stated that these vacancies were due to foreclosures, inability to sell the units and owners abandoning units that became worth less than outstanding mortgages.
- High delinquency rates: Delinquency rates reported by this CIA survey concluded that they are now almost triple what they were in 2005. Sixty-three percent of associations stated that their delinquency rate exceeded 5%, 1-in-3 associations reported a delinquency rate above 10% and a shocking 1-in-10 are battling a delinquency rate that exceeds 20%.
Condo associations indicated that they are taking a variety of steps to address shortcomings, among them:
- Increasing homeowner assessments
- Reducing reserve fund contributions
- Reducing landscaping services
- Deferring maintenance
- Postponing planned capital improvement projects
It's not all bad news though. Rental property owners have a promising year ahead of them, thanks to reports of strengthening occupancy rates and rising rents. Landlords and property managers have been reporting an improvement in the quality of residents measured by their credit history and income, due largely to the housing market and fact that many would-be buyers are turning to the rental market.
Though data compiled in this report shows only a 1% increase in household income during the previous year, rental property owners are seeing positive movement within their market.
Brownstone Insurance has the knowledge to help your multi-unit property this year. We know what coverage you should have, how you can save money and how to streamline procedures. Contact us or complete one of our simple forms to get a quote today and make 2012 a good year for your property!