The Broward-Palm Beach version of the excellent local free newspaper in southeast Florida, The New Times, this week featured an article showing examples of a number of specific condominium developments in the counties that were built since 2003, and the fate they have suffered in the economic downturn and property collapse in the area.
Condo developments are currently suffering a variety of problems - mainly because so many were built in the last five or so years, and the sluggish economy means that now there just aren't the people to buy them. To give you an idea, Miami-Dade county saw a whopping 23,000 condos built since 2003; Broward and Palm Beach counties together didn't quite reach that figure, although still managed a staggeringly high 18,000.
The developments mentioned in the article are Tao Sawgrass in Sunrise, Broward (near Sawgrass Mills mega-mall) which apparently has not a single resident (some units have been bought, but most likely by investors intending to flip units); CityPlace in West Palm Beach, which has very few residents; and the Villa Medici in Fort Lauderdale, which has suffered from crime in the recent past.
The article also mentions the Radius development in downtown Hollywood. As stated in the article, this development had its moment of fame a few years back when hundreds of people were queuing up outside, so keen were they to buy units. Although suffering from some issues - such as residents having to pay higher monthly maintenance fees (to balance out the lack of fees received from unsold and unoccupied units), and complaints about the quality of finish - the development is reasonably successful, with about 85% of units sold. (Only about 64% are occupied, however.) Part of the Radius's "success" is down to the fact that the developers are now willing to sell units for much discounted prices and are also moving away from their original vision of selling to sophisticated, up-market, young buyers. Of course, the Radius development is also in an area that has been much regenerated - Young Circle now features a delightful little park, and some of the surrounding streets have had new restaurants, bars and shops in the last few years.
In some other cases, however, developers were expecting that once they had started or completed construction of their developments, others would follow suit to revitalise the surrounding areas. This was often not the case, meaning that completed condo developments now find themselves in less than favourable areas.
One property analyst, Jack McCabe, believes that it will be another year before prices bottom out, whilst a full five years before condo developments have more occupied units than vacant ones. As mentioned in previous blog posts, one group of home occupiers - renters - will benefit at the moment as condo owners decide to temporarily (even for a few years) rent out their smart units and wait for the market to recover. Renters now find themselves being able to afford living in apartments or areas that were previously too expensive.
Those that desperately need to sell, however, will most likely need to take a hit on their asking price, or may even slide into foreclosure. Meanwhile, residents of these (not even) half filled condo blocks are also suffering. They face living in deserted developments, in some cases in areas that aren't especially desirable, whilst not all facilities are being kept to proper standards, yet paying over the odds in maintenance fees.
Article: South Florida's Housing Crisis Leaves Behind Ghost Towers (17th June 2009, Broward-Palm Beach New Times)
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