Buying a condo in downtown can be a fantastic choice for you if you want to be in a very walkable area. The Pearl District is amazing and offers so many great choices. It is also the area that has the most buildings in litigation. To answer your question of whether you should stay away from these buildings, I would say it depends. Right now these buildings are under some pricing pressure due to the lack of available financing. This can actually be a good thing for a buyer as you can make a purchase under the true market value of the unit. In the stock market there is a saying "Buy em when they hate em!". Same can be said with buying a condo with litigation. The Elizabeth is in one of those situations. The HOA has been battling with a company in regards to "alleged" plumbing issues, and I say alleged because I have already been contacted once by the companies attorneys for writing about the issues on my blog.
The company has already made two settlement offers to the HOA that have been turned down. The issue goes to trial in January so I would expect to see at least one more stronger offer made by the company. But because of this, prices are down at the Elizabeth. Cash buyers have been able to go in and buy at some pretty good prices! Don't have cash? Try to get creative if you can, maybe a bridge loan could work in your situation?
I am a condo specialist and the one thing I would say is to make sure that your agent helps you get all the information you need to make a solid decision. Sure it is important to review all of the HOA documents like the Bylaws, meeting minutes, reserve funds etc. It is also important to get a grasp on future assessments that could be involved at a later date. If the settlement does not cover the potential cost of repairs, you could get an assessment down the road. This may be ok if it is something your agent let you know about ahead of time. If you are able to buy a unit that is $30,000 to $40,000 under value because of the lawsuit, and you get a $5,000 assessment in the future that you were planning for... you just made a great investment!
Bottom line is that there are many great options out there to look at. My recommendation as a condo specialist is to get out and look at all of the options. I have had buyers who did not want to look at loft style condos at first fall in love with them. I have had buyers that were set on the Pearl District at first decide to buy in South Waterfront. I am here to help if you need it!
Janeese Jackson, Principal Broker
Real Estate Resource
I am sure you have gotten a ton of great advice here, but I am going to pour in my two cents. I have had listings in buildings, complexes with ongoing litigation and they are a challenge to sell based on the lack of financing availability. This drives prices lower for those that absolutely have to sell. Inevitably these issues get resolved and once it does, values typically rebound quickly. This could be a great investment for you if you are able to get the financing or buy with cash.
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Best of luck!
You can also freely search all of the Oregon MLS to see condos and townhouses in a map view so you see what works best for you. Also the property information is 'unlocked' so you can view everything about it.
Once you find a condo/townhouse you will want docs from the HOA (home owners association) showing their financial shape, upcoming maintenance/assessments, lawsuits if any, and more before you buy. Sometimes the HOA will have the information online freely available, occasionally it will be on condocerts.com, and my favorite is the seller has already asked the hoa for docs and makes it available. I would just make your real estate person track the info down for you and then review it together.
Its been my experience that if there is a pending lawsuit then typically financing is a no go. It is possible to get a loan but it will be at a higher rate and/or need more down. There are plenty of healthy, stable condos downtown. First step is looking.
I sell lots of condo properties and townhome properties and would be happy to have a more in-depth conversation with you.
Principal Broker, Owner
Inhabit Real Estate Company