Leasing restrictions made sense when the real estate market was healthy. There weren’t many complaints because most property owners had some equity that would allow them to sell should the need arise. The documented decline in condo values makes such a scenario impossible today, and many owners find themselves stuck in a unit they no longer want or need. Lifting these restrictions will help the market recover as a flood of new investment will reinvigorate condo values and give an out to those owners who find themselves in a situation where they must move.
As it currently stands, the condo market is flooded with an oversupply of inventory and leasing restrictions artificially reduce demand, as illustrated below:
It doesn’t take an economist to understand that increased inventories with reduced demand will have a suppressive impact on condo prices. Leasing restrictions effectively halt investors from competitively bidding on the oversupply of units. Why would an investor purchase condo units if they are unable to lease them? I understand that there is some sentiment in certain communities that encourage this situation. But as long as status quo remains, expect condo values to continue lagging behind as a new stream of foreclosures keep unit values in the tank.
If you are a victim of a leasing restriction in the Atlanta area, contact my law office at 404-522-0341 to briefly discuss your situation with an experienced attorney. I can turn your toxic mortgage into a valuable asset and discuss HOA leasing in Georgia with you.