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RiversideGator

Condo boom/bust in Miami

Is there an unsustainable condo boom in Miami?  

23 members have voted

  1. 1. Is there an unsustainable condo boom in Miami?

    • Yes, the condos are driven by speculators and disaster is nigh
      5
    • No, this new boom is based on real demand by real residents
      4
    • Who knows, but this is fun to watch
      14


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Then there is the other factor, anecdotal and unquantifiable: the speculator.

''As much as 85 percent of all condominium sales in [downtown Miami]are accounted for by investors and speculators,'' housing analysts at investment firm Raymond James warned in a March report.

Banks have started to back off lending on condo projects, or have instituted new rules to avoid giving mortgages to investors.

Spiegelman sold the condo units in the Marina Blue condo going up on Biscayne Boulevard.

''One hundred percent of the buyers were investors and speculators,'' he said. ``Anyone who tells you their projects are different are deluding themselves.''

From the Miami Herald: http://www.miami.com/mld/miamiherald/news/11698211.htm

Do y'all think the current condo boom in Miami is based on real demand or on speculation? I think even the biggest optimist must be concerned to see that 100% of buyers in a project were investors/speculators. This does not sound sustainable to me. Still, if they are built, they will exist and ultimately add to the vibrancy of Miami. What do y'all think?

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Miami residents won't be able to afford the new condos. I'm betting when they are built it'll be something like this, a sort of rich person's seasonal playground, similar to resort towns like miami beach.

Some skeptics, noting the high condo prices and the out-of-town provenance of buyers, fear that instead of the diverse, working 24-hour downtown that city leaders envision, the boom will instead create a seasonal playground for the rich, a Monte Carlo on Biscayne Bay.

''I bet those buildings are going to be empty a lot of the time,'' said Joel Kotkin, an urban historian and consultant who has written about the rise of what he calls ''ephemeral cities'' -- places like San Francisco, Berlin and parts of New York that increasingly cater to the rich, the childless young and tourists.

''Maybe this is Miami's karma, to be this kind of place, a temporary, hip, cool, nomadic population serviced by a poor population,'' said Kotkin, author of The City: A Global History. But, he added: ``History shows a city has to maintain some sense of a middle-class character if it wants to thrive.''

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I voted 'who knows...'

And, yes, many projects are being snatched up by investors, they are being resold to individual buyers.

And I would further suggest that the boom does not need many 'real residents' to sustain itself, as Miami has become quite the global capital magnet.

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The one thing that bodes well for Florida real estate is the impending retirement of the baby boomers. The interesting thig will be how the alredy stressed natural resources of places like Florida and Arizona respond.

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I'm going to go with "Who knows" as well. But I'm also going to lightheartedly say, "Who cares?"

IF the market is being driven solely by investors and speculators, then that means most of these properties will be ineligible for homestead exemptions, so that translates into higher tax revenues collected for all tax-levying authorities in the area. The city, county, school board, etc. benefit.

And IF, for some reason, there is a crash, then suddenly there's gonna be lots of cheap condos that I'll suddenly be able to afford. And lots of tax certificates to grab. And the cycle will repeat itself once more.

As for natural resources, one of the major reasons that the Everglades Restoration Project is so important is that a serious replumbing effort has to be made so that more water can be stored for urban and natural uses, and so that the developed areas are as protected from flooding as practically feasible. In the thread, I briefly cover some of this.

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i find it hard to believe that 100% of marinablue condos were sold to specs,you're telling me that not even one person wanted to live there,i find it to be b.s.

<{POST_SNAPBACK}>

Too many people are SO hungry to see their quotes in print, they spend too much energy trying to figure out what kind of quote the reporter is looking for. This quote was almost certainly driven by such idiotocy.......

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I'm buying in a few south florida developments and NO WHERE do you find 100% investors. I'm buying in the Metropolis Towers, in Villaggio at the Grove and a house in Miramar. None of these properties is made up of 100% investors, not only that, from my communication with the sales offices I've realized that it's only about 20% investors or so. I'm one of those investors, on all 3 of these properties.

<p>

It's true what was said above about the speculators buying these properties...it doesn't really matter. These investors will be paying the property taxes and maintaining values high (by not selling), but if there is a big sell-off then prices will plummet, which means that it makes the properties affordable again, then once everyone jumps in on the affordability, the prices will start to go up again; I took a Price Theory Economics class in college and learned that that's the way the cycle works.

<p>

Historically there may be ups and downs in real estate, but in the end it keeps creeping up and up. I'm only 29, so I'm not talking from experience, but rather from articles I've read. It's all about supply and demand and S. Florida has both of those things in its favor, when it comes to escalating prices in the future. There is limited land to build on, I mean, just visit Orlando to compare how little land we have in S. FL. I'm buying a nice house in Orlando right now for about 1/2 the cost of Miami...cause there's lots of land up there. So aside from there being little land left in S. FL, there is also the baby boom starting in the next 4 years or so, and this boom will last for almost 20 years. From what I've read in some polls, some 20%+ of babyboomers are leaving their homes and probably are going to be looking for warm weather and especially nice winters - something S. FL has to offer. If Florida and Arizona are the two top retirement states and babyboomer are a massive group in this country, then simple logic tells you that we're just now gearing up for what's coming!

<p>

I think the real worry will set in when #1 developers can't sell these units, which will catch the attention of other developers and new construction will freeze. Remember, investors are taking as big, if not a bigger risk than are the developers. If investors see that their properties are not renting or re-selling, they're going to stop investing in the new properties...something that doesn't seem to be happening yet.

<p>

Maybe I'm too optimistic, but just from my 3 South Florida pre-construction projects the values have increased about $150,000 from the day I put my deposits down, and the projects aren't even close to closing yet. Which means that if values dropped from where they currently are valued at, it means little to me, because I'm already up so much.

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As the great Miami city commisioner Johnny Winton said, "Build 'em, if they fail, we're going to end up with affordable housing."

That quote came from this article which is a different look on things.

http://www.miamitodaynews.com/news/050512/...viewpoint.shtml

I vote who cares. This is fun. What's the downside? Where's the impending disaster?

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As the great Miami city commisioner Johnny Winton said, "Build 'em, if they fail, we're going to end up with affordable housing."

That quote came from this article which is a different look on things.

http://www.miamitodaynews.com/news/050512/...viewpoint.shtml

I vote who cares.  This is fun.  What's the downside?  Where's the impending disaster?

<{POST_SNAPBACK}>

I have heard both arguments. I seem to take a more moderate approach. I don't believe the condo boom will go to bust but probably the prices will drop or even out.

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Interesting article about the launch parties - alot of hype and lack of substance to me

Salsa Dancers and Stunt Men? Must Be a Miami Condo Project

By ABBY GOODNOUGH

Published: May 23, 2005

MIAMI, May 22 - In the last month alone, you could salsa with dancers in fringed hot pants at Aqua, hear a drag queen D.J. at Cynergi or watch stunt men ricochet off a trampoline at Soleil.

http://www.nytimes.com/2005/05/23/national...ondo.html?8hpib

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