How The Real Estate Slowdown Is Affecting The Miami-Dade Condo Market
March 20, 2008
Imagine this: You’re smack in bed asleep, in your newly rented Miami condo, only to be awakened by someone knocking at your door first hour in the morning. You suddenly find out that on the other side of that door is a sheriff, who is there to serve your landlord one of many Florida foreclosure notices.
As sad as it may seem, this unfortunately is all too common a scene to many tenants of South Florida condominiums. While many say that the housing slump is not going to be that protracted and bloody, just how is it felt in many condo households in the Miami-Dade area?
Housing Market Prospects For 2008
As we go into the early months of 2008, the housing market in this vibrant and diverse area of the state, is seeing a large number of condominium developments with hundreds of millions of dollars in defaulted mortgages, and are struggling to keep their heads afloat.
According to housing market analysts, in the 20 condo developments in Miami-Dade and Broward counties with the largest numbers of units in foreclosure, the number loans in default accounted to more than $271.8 million. Along Miami’s Brickell Avenue, in the financial district, one will find out that three of the top five buildings that are going through foreclosure, as the place has been jokingly referred to as the ‘Florida foreclosure district’.
The percentage of units in foreclosure widely varies, among the 20 buildings ranked at the top. For some large condo developments, a large number of units in foreclosure however still represents a lesser portion of the overall building in some of Miami’s larger condo buildings.
From an investment standpoint, there were positive expectations of how spectacular Brickell was going to be, however the widespread mortgage fraud involving inflated appraisals and speculators had led to the nauseating rise in defaults and property foreclosures in the state as a whole. One local Miami property broker even joked that “These buildings are notorious because the fraud was so prevalent”.
Many Are Hopeful That Conditions Will Quickly Improve
For buyers who are that are looking for a bargain in Miami-Dade County will be happy to know at least that these opportunities only get better as the construction of some 10,000 units is finished, contributing to the glut.
However, in the meantime, the residents of condos in the Miami metropolitan area that have high foreclosure rates are living with the burden of vacant units, and some even face special assessments and increases in the in maintenance fees from community associations that have widening budget shortfalls. Some condo homeowner associations are still struggling to cover expenses because a large segment of their residents are behind on fees and other payments.
As a result, homeowners and other members could see unkempt gardens and grounds, and other disruptions in basic services, such as a cut-off in cable and internet service. Some of these building’s tenants however say they aren’t worried, and they are in this for the long haul. A lot of condo owners and renters still have high hopes that they will prosper in the end, and eventually profit from their investments.
Vanessa Arellano Doctor