Welcome to Miami, and a real estate crash

[marmar]

from The Globe and Mail (Canada):



Flip? Flop
Sunny Miami was once prized for its beach vistas and easy-money condo market. But as prices spiral downward, speculators are in trouble, and the pain is widespread

BARRIE MCKENNA
March 14, 2008

MIAMI -- The condominium towers of Miami's Brickell Avenue strip are at their most dazzling by day - their mirrored facades shimmering against the emerald waters of Biscayne Bay.

Sundown, however, quickly exposes the stark reality of the U.S. real estate swamp.

A dozen towers stand out as darkened monoliths against the night sky. The lights are off because no one is home. In downtown Miami, thousands of condo units, many unsold or already in foreclosure, sit empty and unwanted. Now, the vultures are circling - the inevitable hangover from a wild ride of speculative excess.

"No one expected to ever have to live in them," explained real estate broker Peter Zalewski of Condo Vultures Realty, which represents buyers eager to scoop up condos from distressed owners.

The market crashed, and the lights went out. Miami now enjoys the dubious distinction of being the worst major real estate market in the United States, perhaps the world.

Prices citywide were 17.5 per cent lower in December than a year earlier, according to the latest S&P Case-Schiller national home price index - easily eclipsing other speculative hot spots, such as Las Vegas, Phoenix and San Diego.

The market value of downtown condos has plunged as much as 50 per cent, from a peak average price of $500 to $700 (U.S.) a square foot to as low as $300 a square foot - or less than it costs to build a condo. ......(more)

The complete piece is at: http://www.theglobeandmail.com/servlet/story/LAC.20080314.RSUBPRIME14/TPStory/

[dsc]

1. even at 300 a square foot

a small (1000 square foot condo) costs 300k. That isn't exactly chump change.

[marmar]

2. Perhaps not, but it's a lot less than its developers were expecting (and spent) on them....

n/t

[Nay]

3. It's not exactly a fire sale, is it? $300,000 for 1000 sq ft? I'd say prices

are gonna have to go a little lower than that, esp since rich buyers want more than 1000 SF, generally.

[El Pinko]

4. Why would anyone pay over 150/ sq foot for a stupid condo?

It's in a hellish, 3rd-world no-class, no-culture mosquito-infested sweatbox dump like Miami*, you don't have any LAND, and the association fees are sky-high.

(*I lived in Miami for 4 years, so I KNOW.)

[Warpy]

5. The association fees are how they'll have to make their money

and I can't imagine living in a glitzy crackerbox like space in a high rise condo, neighbors above and below and on both sides, just so I can look out the window and see more high rise condos. Condos combine the worst of apartment living with all the liabilities of home ownership.

Plus, as you said, they're in Miami.

[Leopolds Ghost]

6. It's called APARTMENT CONVERSION, but American Idiots (tm), even liberals, hate Tenants.

Because they are median-income (i.e. poor) and drive down property values back to where they should be.

Escalating property values are purely designed to segregate the lower classes. They have no place in America.

[Delphinus]

7. Hmm...

From Canada. Has our M$M spent a lot of time talking about this?

[ThomWV]

8. Let it slip into the sea

[Earth_First]

9. Here is where 70% of the current mortgage mess originates...

...the fallout from the speculation junkies and developers.