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.
In 2004 thousands of new high rise condos in downtown Miami went under construction. Lots of investors signed pre-construction contracts on these units. They thought they would be able to flip them for huge profits. These units were scheduled to be finished in mid to late 2005 which just happened to be the time the real estate market came to a halt. Most of these investors that couldn't flip them or move into them walked away from their contracts and deposits.
This left hundreds or thousands of units vacant with builders scrambling to sell them. They offered incentives like, free maintenance for one year, appliance upgrades or no closing costs. After six to ten months of no sales this didn't work so they started reducing prices. I don't think they were making any profits but they just wanted to get out of the projects.
As of June 23, 2008 there are 4,591 vacant units and 14,742 active listings in the downtown/beach areas in Miami per the multiple listing service.
So is it time to snatch these units up?
Here's some of the reasons why you may want to wait before you buy;
1. With this many units on the market values are going to continue to decline.
2. Condo projects like these may be hard to obtain financing in.
3. The monthly/yearly maintenance may go up substantially.
4. There may be ongoing special assessments in the condo budgets.
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.
Well I hope this information has helped you realize some of the obstacles you may face. As always "Buyer Beware".
To get property information in Miami you can go to www.miamidade.gov and click on property search.
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.
In 2004 thousands of new high rise condos in downtown Miami went under construction. Lots of investors signed pre-construction contracts on these units. They thought they would be able to flip them for huge profits. These units were scheduled to be finished in mid to late 2005 which just happened to be the time the real estate market came to a halt. Most of these investors that couldn't flip them or move into them walked away from their contracts and deposits.
This left hundreds or thousands of units vacant with builders scrambling to sell them. They offered incentives like, free maintenance for one year, appliance upgrades or no closing costs. After six to ten months of no sales this didn't work so they started reducing prices. I don't think they were making any profits but they just wanted to get out of the projects.
As of June 23, 2008 there are 4,591 vacant units and 14,742 active listings in the downtown/beach areas in Miami per the multiple listing service.
So is it time to snatch these units up?
Here's some of the reasons why you may want to wait before you buy;
1. With this many units on the market values are going to continue to decline.
2. Condo projects like these may be hard to obtain financing in.
3. The monthly/yearly maintenance may go up substantially.
4. There may be ongoing special assessments in the condo budgets.
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.
Well I hope this information has helped you realize some of the obstacles you may face. As always "Buyer Beware".
To get property information in Miami you can go to www.miamidade.gov and click on property search.
About the Author:
About the author: Frank Kasper has retired after 21 years as an appraiser/real estate agent and now is a full time investor. To receive a free report and see what Frank uses when investing go to real estate, and
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