Buyers are ‘condo-fishing’ in some markets
March 4th, 2008 - Category: CondoMiami has a new vice: bottom-fishing for condo bargains.
Some are searching for investment properties, confident home prices will eventually rebound. In hard-hit Miami-Dade County, condos originally costing as much as $1.4 million at the peak of the market now sell in some cases for $840,000, a 40 percent drop. Farther north, a coming auction at Solaire at the Plaza, a new condo tower in downtown Orlando, has set a minimum selling price of $170,000 on 24 one-bedroom units once priced as high as $296,000.
Such price drops have people like Bruce and Suzanne Bowen, of San Juan, Puerto Rico, stalking deals. The Bowens have visited Miami three times since November to scout for properties, and recently bought a two-bedroom, 1,200-square-foot unit on a high floor with water views in Miami’s fashionable Brickell district. Now, the couple is looking for a second condo.
As the price of condos — which tend to be popular among investors, retirees and second-home owners — take a dive in many once-hot markets, buyers are emerging to grab properties on the cheap. In Las Vegas, more than 16,000 condo units are under construction and nearly 18,000 more are proposed, according to SalesTraq, which tracks new-home construction. San Diego, meanwhile, is attracting Arizonans buying condos for as much as 50 percent off the high prices set in 2004 and 2005.
Of course, buyers shouldn’t be seduced by big price drops alone. The developer of Midtown Miami didn’t return calls seeking comment.
That pushed construction costs sharply higher, as demand spiked for building materials and labor, and has resulted in gaping price disparities among different developments.
Moreover, foreclosed properties in South Florida tend to be priced near the mortgage amount. Given the run-up in prices before the shakeout, that means foreclosure buyers could pay inflated prices at the auction block.
