Investors are gobbling up condos like the good old pre-foreclosure crisis days

Posted on August 31, 2009
Filed Under Foreclosure Homes | 2 Comments

Investors are gobbling up condos in downtown Miami like the good old pre-foreclosure days. Recently the developers have managed to sell hundreds of condos marking intense trading activity. They have not seen the likes of it since the peak of the housing boom. Some of the developers have exhausted their stock.
The first property to be snapped up was Brickwell on the River. It took place within six weeks when 120 units were sold off.  Andres Asion of Miami Real Estate said, “It’s pretty impressive when you walk into a sales office and you have 20-30 people waiting to see units. Sounds crazy but it’s actually happening now.” Even before he went to deposit the cheques the entire building had been sold – something unheard of in the previous three years.

It was no miracle. The magic happened because the developers reduced the price to about 50% of the price in which the property had been valued during the peak season. Asion explained, “You could see it in the pricing. When you could buy a two bedroom condo for $220,000 in which before it was $450,000 people are really pulling the trigger.”

Others in the same line of business have taken note of their success. The Ivy is expected to be sold off next.

Peter Zalewski of Condovultures.com said, “It’s just a wave. The investors are swarming from one building to another to another and all of it has to do with price point which is roughly $200 a square foot. That’s really the magic number.” Condovolutres keep unfailing track on the real estate market in downtown Miami. Zalewski had noticed that in the past few months the inventories were rapidly declining. At one point of time there were 25,000 units begging to be sold but lately the figure has gone down to 9,000. About half of these units are empty and in some stage of foreclosure. It means 4,500 units can be had for the grabbing. From the trend Zalewski opines that the housing sector will be the first one to come out of the gloom of recession. He added, “Most people are saying it’s spin. It’s the realtors trying to blow smoke and trying to get people back into the marketplace. That’s not the case. Walk yourself into a sales center that’s priced at $200 a square foot. Take a number. Kick back and try to get a soda. You won’t even be able to get a soda out of the refrigerator they are running out of the stuff so quickly.”

It does not seem that bulk buyers are snapping up the units – mostly they are foreigners and investors.

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