Miami’s Condo Glut Pushes Florida to the Brink of Recession

There is another report to add to the doom and gloom list. This time from Bloomberg. The report is eye-opening:

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

The article discusses how Florida’s economic fortitude was largely attributed to jobs in the real estate sector. Now that the tide has turned, these jobs have dissipated. Ugo Colombo, Tibor Hollo, and the Related Group are mentioned–the Puig bancrupcy fails to escape the report as well. But, what is interesting is how even the articles referenced experts agree that this boom is anomalous:

We sold 38 units of the Opera Tower’s 635 units to Russians,” Hollo said, his eyes widening. “I would never have dreamed it. I would understand 38 Venezuelans, not 38 Russians.

This is dumbfounding to me,” Rosser said. “It’s a building boom in the middle of a housing bust.

There is much more to what is happening than the media says. This is no conventional event in real estate history. It cannot be summed up in one, two, or 10 reports.

Tibor Hollo is dumbfounded by the interest of Russians. Well, this morning one of my articles on Margaret Pace Park was linked to on what seems to be a Dutch speaking forum.

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8 Comments

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8 responses to “Miami’s Condo Glut Pushes Florida to the Brink of Recession

  1. Verticus

    Well, for me, that’s good news. Maybe I can actually afford to buy a downtown condo. Xavier, do us all a favor, please post when you know it’s reached its lowest..

    • Honestly speaking, I like the hblmue, yet ambitious style of UniMerchandise. They want to become a CafePress of Finland, starting a trend in their home country, yet realistically stated that they won’t need much funding in the beginning to opperate.For most of the other participants, asking for hundred thousands of Euros without talking about business model is really dangerous. To investors, it would sounds like Give me this large amount of money. However, I cannot guarantee it will turn profit, because I haven’t figured out a business model yet .Even if the goal of the pitcher is to find partners and mentors, talking about big bucks funding is just plain irrelevant. Save the time for something more important, the product, the market opportunity etc.Just my 2 cents

  2. Good news is relative. For some, it’s a sheer nightmare. Maybe it’d be a good idea for you to track some of the foreclosure listings or find a realtor who knows a desperate seller.

  3. either that or find a crystal ball – wouldn’t that be great!

  4. As you note, the unique properties may never feel the pain. But you can bet that before it’s all over, most condos will get a lot cheaper. These downturns usually last a long time, 2 years more or less. So you will have plenty of time to guage the bottom of the market. The trick isn’t to try to wait for the lowest priced victim but a significant drop in price for a desirable project with good ammenities and an excellent location. Probably in mid to late 2008.

  5. Xavier, Thanks for keeping us informed!

    I’ve been watching the prices too. Right now I’m not ready to purchase, but I figure if things go right, I’ll be ready by late 2008, early 2009. Maybe by then I could get decent high-rise condo Downtown. That would truly be awesome!

  6. A lot of opportunities will be on the horizon. Though the rampant over-speculation caused the condo glut; it will all work itself out.

    Don’t get me wrong, the healing will not be pretty. Time heals all wounds–even those created by Related.

  7. I’m sure Jorge Perez is straight chilling no matter what.

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