Other articles by Joseph Barrios:

Heed law, real estate folks are warned Real Estate by Joseph Barrios : Home buyer got a scareReal Estate by Joseph Barrios: New Pulte project is its own building Deal OK'd in Rocky Point dispute Real Estate by Joseph Barrios : New service can expose your home's hidden hazard history Survey: Signs of cooling in local job growth Real Estate by Joseph Barrios : New landlord working wonders with apartments Banking scene shifting Fatality is first in parade's history Real Estate by Joseph Barrios : Wendt, mover at Long, moves on

Health Care
Sierra Tucson
Eating Disorders Program Coordinator Health Care
CENTRAL ARIZONA COLLEGE
DIRECTOR OF HEALTH INFORMATION MANAGEMENT Trades/Construction
RANCHO RESORT
MAINTANANCE POSITION Administrative & Professional
Tucson Urban League
CEO/President Sales and Marketing
Everready Glass
Sales Reps Mechanical
Komatsu Equipment Co
Resident Field Mechanic Administrative & Professional
Jorgensen Brooks Group
Counselor

The condos will keep coming, experts say, but it remains to be seen who will live in them.

Tucson's condo market will likely cool off in 2006, said University of Arizona economist Marshall Vest during his economic forecast this month.

This year, real estate experts estimated that more than 4,000 condominiums are planned. Some are to be built from the ground up. Most will be refurbished apartment complexes. Condo investment appeared frenzied this year, especially around the Santa Catalinas, where some people camped out overnight to pay a minimum of $145,000 at Tierra Catalina, a 120-unit project at 3201 E. Skyline Drive. It sold out within three hours on March 16.

But as Tucson's housing market appears to level off, Vest said the future of condos is in question. The economics in Tucson are changing.

"When you see the condos, you're pretty close to a market top. It will be interesting to see what happens with the condo market," he said.

This week, in a follow-up interview, he said the affordability of rental housing may affect the popularity of buying a home.

"Of course, the condo conversions are an effort at affordability. Since there's no land with condos, they can sell more cheaply," Vest said this week. "But since we've seen prior business cycles, we've seen condo developments. They've never really caught on in this part of the country."

That's because, while condos are a success in more urban cities, "Tucson doesn't go up, it goes out. It's a sprawl city. And most people who move out here want that piece of land. Most people who move out here want a little piece of land," Vest said.

Vest suggested that people may favor renting a home over buying a condo with no yard.

But at least one local broker — the guy who finances the majority of condo purchases here — "respectfully disagreed" that condos herald a market peak. He said the market will be strong for years to come.

Dino Paone, president and owner of Paone Mortgage Corp., is the preferred lender for every "major" condo conversion in town. Retiring baby boomers, for example, who move here will prefer good locations like the Northwest and Catalina Foothills areas over a free-standing home with a yard.

Paone said some national indicators say condos will remain favorable housing investments. Fannie Mae, he said, raised their loan limit to allow up to 40 percent of condos in a complex to be owned by investors. Most condo projects in Tucson voluntarily limit their investor rate to 30 percent, Paone said.

Condominiums have appreciated at a rate similar to single-family houses over the last year, according to the National Association of Realtors. The national median price of a condo increased by 15.3 percent to $229,000, compared with a single-family house, which increased 16.6 percent to $216,200 over last year.

Individual condo complexes are still drawing interest from investors and from people who want a new home. Paone said he's working with a San Diego company that plans to invest approximately $70 million in apartment conversions over the next few years.