Is It Time To Buy A New Luxury Condo In Miami?
So you’re thinking about buying a new condominium in Miami. Then you better do your homework like your life depends on it. I know it would be really neat to be living in a new high rise condo in Miami. Well here are some facts that you may want to check into before you put down a deposit.
There are thousands of new vacant condos in the Miami area with ocean, bay or city views, valet services and roof top pools. Before you pack your bags you might want to ask yourself why are all these “luxury” condos still vacant?
I’m going to share with you some of the reasons these condos are still vacant and why you may be making a big financial mistake if you buy one.
Starting in 2004 thousands of new condos in Miami went under construction. Investors flocked to these units in order to sign pre-construction contracts in the hopes that they would be able to flip them for huge profits. With closing dates set for mid to late 2005 they thought they were going to cash in big. But the market came to a screeching halt at the end of 2005. The investors that couldn’t flip them or move into them walked away from their deposits and contracts.
This one fact left hundreds or thousands of units vacant. Builders scrambled to sell them by offering incentives like, one year of free maintenance, no closing costs or appliance upgrades. Well after six months this didn’t work so they started reducing prices to the point where I don’t think they were making any profit. These builders just wanted to get out of the projects and get the units sold.
So fast forward to June 23, 2008 and there are 14,742 active listings in the downtown/beach areas in Miami and 4,591 of these units are vacant per the Multiple Listing Service.
So isn’t it time to buy these units?
I don’t think so and here’s some of the reasons why;
1. With this many units on the market values are going to continue to decline.
2. These condo projects may be hard to obtain financing in.
3. The monthly/yearly maintenance fees may be going up dramatically due to the number of vancant units.
4. There may be ongoing special assessments in the condo budgets.
5. The number of rentals in the project may be too high to obtain financing.
6. There may be a substantial number of foreclosures in the building which may prohibit financing.
Well I hope this information has helped you realize some of the obstacles you may face. As always “Buyer Beware”.
To obtain property information in Miami Dade County go to www.miamidade.gov and click on property search link.
Filed under: Sales