Although the air is full of insecure eyes on the Miami real estate condo market, there are still some people who consider Miami to be the hot spot for condos in the nation. The sun in Miami Beach was as scorching as every time I passed through the area, it is always special. It had only been a year since I last visited, but under the belly of the city something had changed subtly, almost imperceptibly.
When you go to Miami, you will see that the beach was still full of sun-drenched tourists, but by my calculations it was less crowded, as were the shops along the art deco streets. There were still small planes dragging banners through the air, but while last year it was invariably about holidays and new store openings, this year they announced foreclosure auctions and closing sales. To make a long story short, Miami is still Miami. Even in South Beach, one of the most elegant areas of the city, there were “for sale” or “rent” signs on almost every street. The skyline was still full of cranes, but most of the buildings were nearing completion and there were few construction projects to begin. Signs that there is a future that varies around the area. Look closely and there’s no question that America is in the midst of a recession and the worst housing collapse since the Great Depression.
Since unemployment in the Sunshine State has reached the highest level in four years and continues to rise. Meanwhile, properties in Miami have already lost a fifth of their value in the last year alone. That’s not good news to hear, but it’s out there and it’s the truth. You can buy an ocean view condo for $ 5,000 or so, although as with the $ 100 house in Detroit I mentioned a few weeks ago, we’re talking about the depths of the dreary here. But the most expensive homes over a million dollars have also fallen to just a fraction of their value at the height of the boom. As a result, the place is littered with bargains, but potential buyers should be aware that this collapse probably still has a long way to go. Prices could fall much more and it will be many more years before they start to rise again. It is always worth taking precautions.
There is a glut of houses for sale and not enough buyers. Although the collapse was sparked by the woes of sub-prime borrowers, who were forced to pay unaffordable mortgage rates, the really destructive dynamite on the foundations of the Florida housing market was set by construction companies, who overbuilt in the last five years. Well I can honestly say that it is a situation comparable to the UK buy to rent market, where developers flooded the market with newly built properties in recent years. The price of flats and “investment” properties in areas where everyone was too excited is already following in Miami’s wake. The price of expensive, exclusive and unique homes is still holding up well, and the same is true even in Florida, the hardest hit country of all US states. But lo and behold, the future is still out there, it’s a ball game for anyone, so don’t discount the Miami Beach condo market for now.