For the ones that do get completed, for the buyers who don't walk away from their down payments and do close, what % drop in value do you think condos in Miami will see 12 months from now?
I'm guessing 20%
That's why I think most folks will just walk away if they haven't closed. 5% is nothing compared to 20%.
Market has peaked, causing problems for condo markets in Miami and West Palm, experts say.
If you're buying a single-family home or condominium, plan to live in it long term because the days of making fast cash in real estate are over, industry experts said Friday
In Miami-Dade, more than 71,500 units are built or planned, Miami real estate consultant Jack Winston said, adding that only 9,100 units were completed countywide in the past 10 years. He did not release figures for Broward or Palm Beach counties.
Some small banks will be in trouble because they've loaned money to condo developers who won't follow through on building plans as the market softens, analysts said Friday. They think falling land prices are inevitable during the next year.
Likewise, real estate speculators will take hits if supply continues to outpace demand, hurting their ability to resell or rent units. Already, agents are reporting price reductions in some condo resales. "Miami is ground zero for the housing bubble," Winston said. "It's going to be severe in Miami, and it's going to be problematic in West Palm. We've built too many units compared to the projections for real users."
January 29, 2006
High-rise speculators likely in for a fall (HP readers - predict how far)
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8 comments:
You're awfully optimistic - I expect a 50% decline at the minimum, and 75% in some locales.
I'll be in Miami this week for some business, I'll see if I can't get some pics for you.
I live in the most prominent building in Miami Beach.
I rent.
Three months-ago, there was 5% of the building's units for sale. Now? There are 15%. Three months from now? Who knows.
I do know this: sales have come to a dead stop.
The tremendous supply will cause prices to drop off like crazy. Especially when there is no demand.
god bless those speculators. What a tough lesson.
National Inventory will EXPLODE in March, April, May, June as EVERYONE "tries" to get out.
I read somewhere -- maybe here -- that an unintended consequence of the new bankruptcy law will be that people will wait until they are completely screwed before filing for bankruptcy to avoid becoming somebody's wage slave for a decade. 20% rather than 5% follows from that. Good call.
The new bankruptcy laws will also keep people out of the market for years longer than the old laws, making a rebound even less likely. Remember, the majority of people using bankruptcy to clean the slate were downsized or dealing with a catastrophic illness in the family, not bankruptcy abusers. I imagine that anyone upside down on a property would gladly offer it up when they are down and out.
In 2001 I put 30K down for a Miami Beach pre-construction 1 bd condo , another 30K when construction started. Total price was 303K. I closed about 9 months ago, it took 3 years to build. They are now selling for about 550 - 600K. I pity the fools paying this kind of money now. I was and am not a flipper but bought it for my vacation / retirement. Since it is a beach front unit the prices will probably be stable, but those new units in downtown Miami are going to be trouble. To me Miami means "beach" so paying so much for a downtown condo does not make sense. When thinking and talking about Miami, keep it seperate from Miami Beach. They are different animals. Anybody else agree that the beach front condo will be more stable than the run of the mill downtown condo?
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