Are you ready to buy a new luxury condo in Miami? If you are then you better do your homework like your life depends on it. These high rise condos would be really neat to live in with all that Miami has to offer. However, here are some things that you may want to check into before you get caught up in all the hype.
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?
Well it’s not that hard to figure out if you know the market.
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?
Here’s some of the reasons why I don’t think its time;
1. Values are still on the 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 substantial special assessments in the condo budgets due to the vacancies.
5. There may be a substantial number of rentals in the project which may affect financing.
6. There may be to many foreclosures in the project to obtain financing.
I hope this information has opened your eyes to some of the pitfalls you may face. You’ve heard the old saying “Buyer Beware” well this couldn’t be more true now and especially if you want to buy in Miami.
For more property information in Miami go to www.miamidade.gov and click on the property search link.