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Posted Jul 20, 2007, 5:04 PM
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Registered User
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Join Date: Feb 2002
Posts: 6,705
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Quote:
Originally Posted by fridayinla
The best part is these aren't fantasy buildings, they'll probably get built.
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I hope they do, & my impatience at seeing such projs, esp parkfifth, under actual construction still drives me crazy. However, and although the amt of new devlpt here is way below what's going on in Fla, the good thing about projs being delayed (like the Glass tower) is we're not going to get as snagged as what's happening to the ppl in Miami:
Miami Condo Glut Pushes Florida's Economy to Brink of Recession
(Bloomberg) -- In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building. The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody's Economy.com, who owns a home in Vero Beach, Florida.
"Florida is the epicenter for all the problems that exist in the housing industry,'' said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. "The problems we have now are unprecedented and a lot of people will get burnt.''
Thirty-seven new high-rise condos and 20,000 new units are being built in Miami's 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research & Consulting LLC in Deerfield Beach, Florida. That's the most unsold units since McCabe began tracking sales in 2002.
Downtown Miami developers already are offering incentives for brokers who connect them to buyers. John Rosser, president of the Key Biscayne, Florida-based John Paul Rosser & Associates Inc. estate brokerage, said he is usually paid a commission of as much as 5 percent when a sale is completed. For the Capital at Brickell, a block off Miami's Brickell Avenue, he was offered what he called "an unheard of'' deal to steer buyers to one of the 832 units proposed. A salesman said Rosser would be paid 5 percent -- payable when buyers put down a deposit. The project has just broken ground and won't open until 2011.
Florida banks have already quit making loans to Miami condo developers, said Kenneth H. Thomas, a Miami bank consultant and a lecturer at the Wharton School at the University of Pennsylvania in Philadelphia. "South Florida lenders were the first to put money into the condo market, they were the first to see the oversupply and they were the first to get out,'' Thomas said.
With prices falling, international investors, hedge funds, private equity firms and Wall Street banks are beginning to shop for deals, said Peter Zalewski of Condo Vultures Realty LLC, a consulting firm in Bal Harbour, Florida. Miami lags only New York in the number of foreign visitors to U.S. cities, attracting 5.3 million in 2006 from Europe, Canada and Latin America, according to the Greater Miami Convention & Visitors Bureau. "Bigger and bigger funds are coming to me wanting to buy,'' Zalewski said. "Prices have yet to hit bottom because the bulk of Miami properties won't come on the market for another six months.''
Cement dust swirls at 10 high-rise condo construction sites on Biscayne Boulevard, with its prime locations overlooking the waterfront; at six sites on Brickell Avenue, home to the glass and steel offices of Banco De La Nacion Argentina, Banco Industrial De Venezuela and Banco Santander Brazil International; and at eight locations on the Miami River, which splits the city into north and south. That's according to data collected by the Miami Downtown Development Authority.
Since it can take up to four years for a condo project to travel from conception to completion, many of the towers rising from the coral rock of Miami were planned and financed during the Florida housing boom, which lasted from 2001 to 2005. Lenders typically require enough advance sales to cover the cost of a construction loan. Customers' deposits, however, don't always mean the sales will close, said Ian Bruce Eichner, a developer whose latest Miami Beach condo tower is scheduled to open in November.
"The market is as close to a depression as Miami has seen in 30 years,'' Eichner said. "There's a gargantuan supply of homes and the overwhelming preponderance were built for speculators, not for people who are living there.''
As much as half of those putting down deposits for Miami condos are speculators looking to flip units, or sell them quickly for a profit without living in them, said McCabe of McCabe Research. With sale prices falling, McCabe said he expects up to 50 percent of them to walk away from their deposits in the next 18 months rather than complete the sales.
"What's going to happen to all those units?'' Eichner asked. "God only knows. You couldn't give me a piece of property in Miami for nothing. I like sleeping at night.''
Many "flippers'' closed on their units and now can't sell them, said Michael Cannon of Integra Realty Resources-Miami Inc., leaving completed condo towers with floors of dark windows and empty balconies. The Jade Residences at Brickell is an example, Cannon said. The 338-unit, 48-story waterfront tower, a block from the Brickell Avenue financial district, opened in August 2004 with buyers willing to pay as much as $5 million snapping up all the units. Now, the new owners have listed 112 condos for sale and 17 units totaling $15 million are in foreclosure.
In the 1970s, when condos were a new product, Florida developers built 500,000 units and prices fell 50 percent, said Brad Hunter of MetroStudy, a research firm in West Palm Beach.
"The difference is, back then they were two-story condo buildings that had $50,000 units,'' Hunter said. "Nowadays they are $700,000 units in 20-story buildings. Instead of building too much stuff that people could afford like we did then, this time we built too much stuff that people can't afford.''
A lot of the inventory 30 years ago was sold off and converted to rental apartments, Goodkin said. That solution won't work now because prices have soared and properties coming on the market will compete with existing condos whose prices have plummeted, he said.
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. LA Live, I was worried, but I think its a nice addition to the skyline. Here is where Park 5th is separated from the skyline, not to crazy about that. 755 looks great, from basicly every angle, and I really hope it gets built! 
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