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Aessotariq

Miami Boom in the National Spotlight

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This thread will feature Miami construction boom stories that are featured in national and international mass media, such as television and radio.

Miami's construction boom was a story on April 23's NBC Nightly News.

"Miami's real estate market is red hot, and investors are scrambling to get into the action. CNBC's Scott Wapner Reports."

You can view it here:

Gold Rush, Miami Style

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a good positive national news story, though. There hasn't been much of that coming out of Florida lately. They seem to have their hands full in the Tampa Bay area.

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very true.

sometimes it takes talking to people in other states to realize how bad Miami's and Florida's reputation is. A lot of people still think it's the golden girls down here.

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Not all that glitters is gold. Still, I think folks can be unduly hard on Florida. Take the 2000 election, for instance. It was only the closest election in the history of the world. Weren't we entitled to a few hanging chads ?

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Posted on Tue, May. 17, 2005

BROADCASTING

The hottest city under the sun

CNBC's business program power lunch investigates the allure of South Florida's hottest city

By JIM WYSS

[email protected]

The only thing hotter than sitting under three high-powered spotlights at high noon -- in a suit and tie -- might be the South Florida real-estate market.

At least that's what CNBC's daytime business program, Power Lunch, seemed to suggest as it kicked off a five-day, five-city roadshow on Monday with a live broadcast from South Beach.

Working from stages set up by the pool and on a balcony at Loews Miami Beach Hotel, host Bill Griffeth set the tone by plugging the city's boiling property market three times in the pre-show teaser before working the phrase ''arguably the hottest real estate market in the country'' into a sort of running chorus for the program. ...

Read more: Miami Herald

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Miami's construction boom was a feature piece on ABC's 20/20. Did anybody see it? Real estate guru Mark Zilbert, who made headlines with his condo flipping website, was interviewed as well.

Delray Beach was also spotlighted. I'm too tired to go into detail now, so I'll get into it later.

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I saw it but the negatives are pertinent to mention as well. The CEO of Countrywide, the nation's largest mortgage firm and a highly regarded guru when it comes to predicting the real estate market, singled out San Fran, specifically Miami-Dade and Broward Cos, and Manhattan condos as being ripe for a significant drop in prices soon. He did say he thought single family housing would level off but not decrease. I'm afraid the condo speculation will lead to a short term crash but there is no doubt in the long term the market will recover and do just fine.

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I saw it but the negatives are pertinent to mention as well. The CEO of Countrywide, the nation's largest mortgage firm and a highly regarded guru when it comes to predicting the real estate market, singled out San Fran, specifically Miami-Dade and Broward Cos, and Manhattan condos as being ripe for a significant drop in prices soon. He did say he thought single family housing would level off but not decrease. I'm afraid the condo speculation will lead to a short term crash but there is no doubt in the long term the market will recover and do just fine.

I didn't see the 20/20 piece, but I did see the CEO of Countrywide on CNBC a couple of days ago. He did say some areas (such as Miami) are going to cool off, because the present growth is unsustainable, but I don't know that he predicted a drop in pricing (Did he?). If Countrywide (and other lenders) were so worried about Miami going bust, why are they loaning money? And if PMI insurance is what covers them from possible losses, why would a PMI insurance company insure the lender, if they believed it was going to drop so much?

I believe things are going to cool off for sure, growth may be 4%-8% per year rather than 24% as it's been the last couple of years, but why would developers be planning for 2006, 2007 and 2008 projects if they might not have any buyers? The funny thing about real estate is that a down turn in prices causes another up turn. If prices were to plummet, then what would happen...#1 builders would stop building (which is a positive because supply would not grow)...#2 smart, long-term, investors would recognize these deals and start buying (another good thing because this means there would be added demand). Prices can only go so low before intelligent investors jump in and save the sector and bring it back up in value.

If the US dollar drops we will see another wave of Europeans coming to the States to buy US properties (and Europeans like Florida), so there's another safety net for FL real estate! Rich Latin Americans also maintain properties in S. Florida.

And the key thing that people forget...BABYBOOMERS...Maybe I give too much credit to this phenomena, but I think when you have millions of people on the verge of retirement (about 4 years and counting down till the US retirement boom begins)...and something like 20%+ of these retirees are indicating that they will relocate to another state for retirement (and Florida and Arizona are the top 2 states selected by these retirees) you have a wonderful recipe for increased demand.

So let's see...so far we have increased demand in Florida real estate (both present and in the near- and long- term, because afterall the baby boom retiree phenomena will last about 20 years), we have limited supply, because you can't build in the Everglades or on the Atlantic Ocean. And we have rising costs of construction, so to build a new home is now a lot more expensive than it was 5 years ago (this helps drive up existing home/condo prices).

Oh yeah...if real estate in S. Florida drops in value, remember, this is not the stock market where you hold a useless piece of paper as your investment...this is a home or a condo where you need to hold on to because it's where you live and it provides you shelter...by holding an investment you are helping it maintain its value. There cannot be a sell off like their was in the 1929 stock market crash because where will these people go? Real estate is not as liquid as a stock, it takes time to sell a property and it's not easy to do once you establish roots.

Just my thoughts...

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well put and I agree. we may face a couple of bumbs along the way, but I'm confident that the South Florida real estate market will be healthy for a long time to come (barring any major hurricanes). There's simply no more room to sprawl.

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I didn't see the 20/20 piece, but I did see the CEO of Countrywide on CNBC a couple of days ago. He did say some areas (such as Miami) are going to cool off, because the present growth is unsustainable, but I don't know that he predicted a drop in pricing (Did he?). If Countrywide (and other lenders) were so worried about Miami going bust, why are they loaning money? And if PMI insurance is what covers them from possible losses, why would a PMI insurance company insure the lender, if they believed it was going to drop so much?

I believe things are going to cool off for sure, growth may be 4%-8% per year rather than 24% as it's been the last couple of years, but why would developers be planning for 2006, 2007 and 2008 projects if they might not have any buyers? The funny thing about real estate is that a down turn in prices causes another up turn. If prices were to plummet, then what would happen...#1 builders would stop building (which is a positive because supply would not grow)...#2 smart, long-term, investors would recognize these deals and start buying (another good thing because this means there would be added demand). Prices can only go so low before intelligent investors jump in and save the sector and bring it back up in value.

If the US dollar drops we will see another wave of Europeans coming to the States to buy US properties (and Europeans like Florida), so there's another safety net for FL real estate! Rich Latin Americans also maintain properties in S. Florida.

And the key thing that people forget...BABYBOOMERS...Maybe I give too much credit to this phenomena, but I think when you have millions of people on the verge of retirement (about 4 years and counting down till the US retirement boom begins)...and something like 20%+ of these retirees are indicating that they will relocate to another state for retirement (and Florida and Arizona are the top 2 states selected by these retirees) you have a wonderful recipe for increased demand.

So let's see...so far we have increased demand in Florida real estate (both present and in the near- and long- term, because afterall the baby boom retiree phenomena will last about 20 years), we have limited supply, because you can't build in the Everglades or on the Atlantic Ocean. And we have rising costs of construction, so to build a new home is now a lot more expensive than it was 5 years ago (this helps drive up existing home/condo prices).

Oh yeah...if real estate in S. Florida drops in value, remember, this is not the stock market where you hold a useless piece of paper as your investment...this is a home or a condo where you need to hold on to because it's where you live and it provides you shelter...by holding an investment you are helping it maintain its value. There cannot be a sell off like their was in the 1929 stock market crash because where will these people go? Real estate is not as liquid as a stock, it takes time to sell a property and it's not easy to do once you establish roots.

Just my thoughts...

He came out a few weeks ago and notes significant "froth" in these areas but this last week specifically mentioned the risk of a condo crash in these areas. Greenspan, too, seems quite worried about the number of creatively financed mortgages (interest-only ARMs, optional payment ARMs) that are being used right now. I think when prices stabilize and those there are a lot of people that invested in real estate with the plan of reselling soon thereafter without significant means to back themselves will be trapped into mortgages they can't afford as they were counting on these condo to continue to have dramatic appreciation in just a few mos or a year and this may not occur. If this happens enough times and there are foreclosures, prices will suffer significantly.

However, for all of the reasons you stated I think it will be just a bump in the road. I don't think people will stop moving to Florida and the people that will move will continue to be quite affluent on average. In fact, a transient drop in price will bring in "vulture investors" and ultimately these will serve to drive prices right back up again.

The Palm Beach Post ran a very good series about real estate speculation and creative financing there and you can find this on their website under "special reports".

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One thing the 20/20 piece didn't consider about the flippers who might end up getting stuck with property they can't sell... Just because they themselves aren't living in them doesn't mean that they aren't going to rent them if they can't sell them immediately. There is a housing shortage in South Florida, and it's becoming harder and harder to find decently priced single family homes, let alone any type of housing. A friend of mine recently went through this nightmare.

I've mentioned before that cities and counties must love these folks because whoever ends up paying the property taxes won't be able to apply for homestead exemptions, so property gets assessed at its full market value.

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That's another interesting question. When and if the "bubble pops", what whill be the real significance to us as a city. How many of these flippers are local? Sure some buildings will lose money and have to be cancelled, but there will be others to take their place.

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That's another interesting question. When and if the "bubble pops", what whill be the real significance to us as a city. How many of these flippers are local? Sure some buildings will lose money and have to be cancelled, but there will be others to take their place.

That's a tough question, seeing as how there is no such thing as a 'bubble'. ;)

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