Boom of condo crash loudest in Miami

Orlando Sentinal ^ | August 27, 2007 | Maya Bell

[Rb ver. 2.0]

MIAMI - The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding.

Now the couple are spending restless nights wrestling with the question that looms like a guillotine: Should they walk away from the $117,000 deposit they plunked down on another investment condo in the ritzy Miami-Dade enclave of Bal Harbour?

[Rb ver. 2.0]

"Multiple construction cranes fill the skyline off Brickell Avenue in downtown Miami, where the nation's most glutted condo market can be found. Orlando has 4,440 condos listed for sale; Miami has 23,000. (SUSAN STOCKER/SOUTH FLORIDA SUN-SENTINEL / August 7, 2007)"

[dfwgator]

[NonValueAdded]

opportunity knocks ... get ‘em before the sea rises and global warming sets them on fire.

[kittymyrib]

Explain to me why struggling middle class tax payers are supposed to bail out these spoiled speculators and their bankers.

[2banana]

Owners of a gourmet shop, the transplanted New Yorkers poured their life savings into deposits on four condos they had planned to flip for a quick profit.

...

But they were forced to close on a condo in Boynton Beach, where they now live, and they face the prospect of losing nearly $200,000

And these are the FOOLS that the liberal candidates are now trying to pander to with a government bailout...

[LIConFem]

Because the spoiled speculators and their bankers have generally have more money to buy politicians than middle class taxpayers.

[org.whodat]

Explain to me why struggling middle class tax payers are supposed to bail out these spoiled speculators and their bankers.

I hope they lose their ass and wind up living in a 69 VW bus.

[Perdogg]

Perdogg in Miami??? hmmm......might be a good idea; warm weather, latin women..;)

[dfwgator]

Sounds like a lot of potential bargains out there for some nice condos.

[Greg F]

I’d laugh harder at the $100,000 wedding by the condo flippers in Miami if I didn’t own a condo in S. Florida! That said, it’s a fixed rate mortgage, I’m living there more cheaply than I could rent, and the condo still retains a good 3000% return in 7 years against the downpayment . . . so . . . I will laugh. Har Har.

[1Old Pro]

Explain to me why struggling middle class tax payers are supposed to bail out these spoiled speculators and their bankers.

We didn't share their profit so we shouldn't share their loss.

[Rb ver. 2.0]

Sweet irony when the city buys unfinished condo hi-rises at a song to turn into public housing in the midst of the other half million dollar private condos.

[keepitreal]

This is what happens when you take your investment advice from the guy sitting next to you at a bar. “Jump in! I made a ton of dough.”

[Babu]

I’ve been following the stories of the Condo Collapse going on in S. Florida, and it is an incredible story. Here in Arizona, both homes and condos have slipped in value only in the low single digits, so we have been more fortunate than S. FL ...

[LetsRok]

You did share their profit. They paid capital gains taxes on the profit. Wait until you (the govt) gets the bill when they write off their loss on next years return.

[Biggs of Michigan]

I do believe my give a damn is busted.....

[Southack]

"Just how many other speculators face the same dilemma in the nation's most glutted condo market will become clear during the next two years. That is when 25,000 new condo units, most of them rising in or near Miami's downtown, will flood an area already saturated with 23,000 condos listed for sale."

Wow!

[Leisler]

It is always, thank God, this way. I’ve read about every financial period in American History from the greedy, debt ridden colony settlers that waded ashore, Ohio canal stocks, Washington was a land speculator, and on and on. Boom and bust. It works better than anyplace in the world. Those condo buildings have taxes every year and will have to be sold and they will be sold at market prices at the time they are sold. Sounds fine to me.

[lilylangtree]

That’s a real response. I like it.

[Sender]

I find it amazing that they continue to build expensive high-rises, openly admitting that there is no need for them. Who is paying for all this unnecessary construction anyway, speculators? Haven’t they gotten the memo?

[BnBlFlag]

Anyone who lived through the real estate crash of the mid - late 80’s in Houston could have seen the present problems coming a mile off.
Overbuilding combined with piss poor lending standards (100% financing, no pre-sales or no pre-leasing on speculative projects, etc).
Same thing on the consumer side. 100% financing to shaky borowers combined with ARMs.
All of this was a recipe for disaster.

[gathersnomoss]

Twenty-Three Thousand? Bwahaha.

[Badeye]

Great graphic.

[Polybius]

Perdogg in Miami??? hmmm......might be a good idea; warm weather, latin women..;)

If you want a beachfront condo in Miami Beach, my sister can sell you two of them.

Fortunately, little sister and her hubby bought the first condo before things went crazy so they may not sustain too much damage. Still, they are sweating bullets now.

[doc30]

Your ‘give a damn’ meter appears slow on this one. Mine was so fast, the popup window didn’t appear.

[Southack]

I paid $55,000 for a 3 bedroom, 2 bath brick home with an enclosed two car garage on a corner lot in a great neighborhood in Houston in 1992 at the bottom of their crash.

You’d have to add digits to the above number to arrive at its current value...but back during the doom and gloom people were saying that I overpaid!

[Southack]

Not merely 23,000. See post #17.

[PogySailor]

Same thing coming to Tampa on Channelside and Bayshore. A LOT of speculator driven development.

[capitalist229]

But...but...but...they're not making any more real estate !!

And they're not making any more money either unless you count the Fed.

BUMP

[BnBlFlag]

” I paid $55,000 for a three BR, two bath house.......in Houston in 1992 at the bottom of their crash. You’d have to add digits to the above number to get to it’s current value.”

You’re right! 1992 was a great year to be buying in Houston. 2009 or 2010 might be a great year for the other places as well. A lot of people have made a lot of money in Houston real estate over the time period you mentioned. (But on the flp side, not before a bunch of folks lost a Helluva lot of money in the ‘80’s.

[radioman]

Ohio canal stocks, Washington was a land speculator, and on and on.

Government did not bailout speculators in those days.
.

[Southack]

Speculators won’t be bailed out this time, either. You think that housing prices will go up due to some “bailout?!”

Nope. The people being bailed out represent the rest of our economy...those who would be otherwise drug down by the housing crash even though we engaged in no ill behavior.

In the meantime, the speculators are toast.

[Southack]

"You’re right! 1992 was a great year to be buying in Houston. 2009 or 2010 might be a great year for the other places as well."

The bottom of the housing market will be almost precisely 18 months after the Fed cuts interest rates...but whether that is from cutting the Discount Window rate this month, or from the Fed Funds rate next month, I couldn't say.

[hawkboy]

Don’t worry Miami those condos will be sold...think of all the middle class Venezuelan refugees fleeing Hugo Chavez and his Marxist regime.

[JTHomes]

The ultimate result of shielding men from the effects of folly is to fill the world with fools.

-Herbert Spencer, English Philosopher (1820-1903)

[PAR35]

I’m surprised that anyone who would blow $100K on a wedding is still married.

[oh8eleven]

"Greed is ..."

[Fawn]

Opportunity? Try paying the exorbinant taxes and hunting down an insurance company for insurance other from citizens who charges 3 times what they should. Buying the place is the cheapest of them. And anyway, they are still WAY overpriced. The condos down the street from me (in PBC) gave up trying to sell them ($240,000 for 1000 sq ft on a filthy canal) and are renting as apts....

My insurance company (amoung others) are paring down what they cover. Mine just announced they know longer cover screened enclosures unless you want to pay more.

[Positive]

From what I can judge looking at this photo; when these units are sold in the next 1 to 100 years, if global warming causes sea level to rise 6 inches or so it’ll be no problem.

[Positive]

"I hope they lose their ass and wind up living in a 69 VW bus."

Or as Chris Farley said on SNL "in a van down by the river."

[Leisler]

Yeah it did.

Washington and others bought what is now Washington, D.C.. The Ohio Canal was built on pubic credit and taxes on east coast landowners. Those in the know bought Ohio land cheap, rallied for the Canal and made a killing. This whole nation was opened up on a tight, buddy-buddy political economy. The US government bought near neigh half the west and also Alaska.

But, I don’t know why these condos need any bailout. Someone someplace owns them. So what? Keep them or sell them. I don’t know what this has to do with any other party, public or private.

[Positive]

"You did share their profit. They paid capital gains taxes on the profit. Wait until you (the govt) gets the bill when they write off their loss on next years return.

Thing is you can carry your losses forward until they are used up...cap gains must be paid when you file for the year you recieved them.

[CDHart]

"Explain to me why struggling middle class tax payers are supposed to bail out these spoiled speculators and their bankers."

Because they made big campaign contributions?

Carolyn

[radioman]

You think that housing prices will go up due to some “bailout?!”

No, I think that my cost of living will go up because the FED is pumping fiat money into the market to bailout speculators
.

[Calpernia]

ping

[PGalt]

LOL! Great graphic. It sums up my sentiment.

[Southack]

There is a bailout. There will be more to the bailout.

I’m not denying a bailout.

What I’m pointing out to you, however, is that the bailout is for non-speculators, non-sub-primers, non-bad-actors.

In contrast, if the bailout was for *speculators*, then condo prices would be rising in Miami, and would continue to rise over the next two years.

That ain’t happenin’.

[Leisler]

Who’s paying? I can not recall the name, but a bank in mainland China was in trouble for buying 9 billion in US sub-prime loans.

Most of the world is paying. Fine. They’re all big boys, right schools. And, anyways, they didn’t have any place in the world where they could park tens of billions and have a reasonable expectation of getting it back. Or, if you could get your loan back, it would be at dismal rates. So the combination of good world wide rates and reasonable repayment has made America a favored place for investments for 400 years. It is not that we are so good, but the rest of the world is so bad, cheap and can not asorb billion dollar loans.

[radioman]

Washington and others bought

Give me just one example where government printed money to bailout subprime lenders in those days.
.

[ReignOfError]

Sweet irony when the city buys unfinished condo hi-rises at a song to turn into public housing in the midst of the other half million dollar private condos.

I don't know about Miami, but on one visit to Orlando, I read in the Sentinel that apartment occupancy was running over 96% -- so many apartments went condo that thee were few rentals left. If unsold condos or foreclosures start stacking up, count on someone -- a government agency or private investors -- to turn them into rental units. Wih that many renters going wanting, it seems like a pretty safe bet.