Condo boom - of sorts - in downtown Miami

A recent article in the Miami Herald showed how sales of condominiums in downtown Miami - around the Brickell Avenue area - are rocketing...all because prices have finally come down to a level that is now attractive to many buyers.

After a lull following the collapse of the property market which saw many condo units remain unsold, and developers struggling to offload them (with some opting to rent them out instead) some building developments are seeing units fly off the shelf. Desperate to sell these condos, and needing to pay back their construction loans as well as trying to avoid bankruptcy, developers are - almost - taking what they can get. Some lenders are even allowing developers to sell for less than cost purely so they can get what's owed back.

Some of the developments mentioned in the article include 500 Brickell (which has an amazingly annoying website, I might add), Brickell on the River South, The Ivy and 1060 Brickell.

Many of those that are snapping up these units are foreign buyers; at 1060 Brickell it is estimated that about 80% of purchasers are from abroad. A huge 98% of these people had purchased with cash - not so surprising given the difficulty in obtaining suitable loans and mortgages these days. These buyers are investing in these condos as holiday homes for themselves or to rent them out, and aren't baulking at the idea of holding onto them until the market and prices rise again - which might be three years away.

Because interest and demand has increased so dramatically for these units - and because there's such a wealth of supply - there's unlikely to be a rise in prices any time soon. Whilst this is good news for buyers - pay attention, buyers! - those property owners looking or needing to sell in the near future may not be able to. Or, at least, not for price that's reasonable to them.

Whilst the increase in the number of units being sold is good news for the moment, the amount of cash-ready buyers will run out at some point. It will be then that condo units will need to be available at prices that are within reach for those that need mortgages to fund their purchase.

So, if you're after a smart new Miami condo and have funds in place, be sure to check out some of these developments. You may find a complete bargain.

Article: Downtown Miami enjoys mini-boom over cut-price condos (4th September 2009, Miami Herald)