Editor’s Note: In the August 2013 issue of the Foreclosure News Report, staff writer Joel Cone highlights the changing real estate market in Miami, Fla., in an article titled: “Miami: Not a ‘Ghost’ Town Anymore. After five years of decline, new life is being breathed into a city as popular with foreign investors as with local homeowners.
Before the Great Recession hit, Miami real estate was red hot and builders were erecting homes like crazy — especially condominium towers. As a result, when the market crashed, Miami was left overbuilt, the shoreline rife with many uninhabited (and some only partially-built) projects. The picture at the time looked so bleak, that local housing analyst Jack McCabe referred to these mostly empty shells as “ghost towers in the sky.”
“There was incredible overdevelopment of condo towers. Plus condo conversion units. We had a monstrous crash. That’s why there are so many foreclosures in Florida,” explained McCabe, CEO of McCabe Research and Consulting based in Miami. “Buildings had 50-100 percent walkaways. It was an incredibly vicious cycle. Six lights were on out of the 500 units. We called them ‘see-through units.’”
Well, Miami real estate is selling once again. The one-time “ghost” towers are filling up. Homebuyers are in the market (if they can get financing) and investors are pouring in — particularly foreign investors — plus the well-capitalized institutional hedge funds like those that raided Phoenix and Las Vegas are on the prowl throughout Florida.
“Five years ago there were 17 cranes building high-rise condos. Then they disappeared,” said Clark Toole, president of Coldwell Banker Residential Real Estate in Sarasota. “In a five-year period the drop and the rise has been pretty dramatic.”
In fact, McCabe notes that 140 projects have been announced in South Florida, 35 alone are set for the Miami metro area. Will they all get built? He’s not sure based on the fact that some of the developers are requiring as much as 40 to 100 percent of the purchase price in advance in order to finance the project. Still, there is potential for this new financing model considering the number of foreign buyers coming into the marketplace.
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