For a while it seemed that Miami might be one part of Florida that was if not immune from the real estate slowdown, protected a bit by its size and cachet. But now prices have started to plummet and putting many real estate speculators in trouble. The Miami skyline is dotted with cranes as buildings continue to go up but thousands of condo units are waiting either unsold or in foreclosure.
The numbers in Miami are startling, According to a report in Canada's Globe and Mail,
prices citywide were 17.5 per cent lower in December than a year earlier with the value of some condos down by as much as half. And as more condo projects in progress are finished up the numbers could even go lower. Condos with sexy names and alluring promotions such as Jade and Vue are now facing millions of dollars in mortgage defaults and foreclosures. It's been a disaster for both investors and developers. In fact, two prominent Miami condo developers who were facing condo problems have died of heart attacks.
The problem in Miami is just part of Florida's boom and bust cycle. Whole towns sprung up over the last few years and many have gone bust just as quickly often leaving half-built homes abandoned (for a great photo series on this check out this piece on Rotunda Sands in Mental Floss
). At this point, practically the entire state of Florida is in some sort of foreclosure crisis making it easy pickings for those from across the country and around the world looking for a real estate deal. Both homeowners who owe more than their homes are worth and developers forced to sell condos at cost or in some cases for even less than it cost to build them are ready to accept all sorts of offers.
For now, the temporary bandage seems to be real estate auctions. The other day I mentioned that two prominent real estate firms in Florida
are working with a major real estate auction company. And just about every day I learn of a new auction
of a condo complex
. Many of the auctions are absolute, meaning that bidders will take whatever they can get. The good news is that this slump cannot last forever and for those who have the means to pick up a warm weather getaway there are major bargains to be had. Maybe this is the time for Miami developers to reach out to Russian investors looking for a place to wait out the winter chill.