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Is It Time To Buy A New Luxury Condo In Miami?

Jun 27, 2008
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.

Back in 2004 thousands of new condos in the downtown Miami area started to be built so alot of investors signed pre-construction contracts thinking they would be able to resell them for a nice profit. The condos weren't going to be finished until mid to late 2005 which happend to be the time the real estate market started to come to a halt. So investors that couldn't sell them or move into them just walked away.

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.

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 is it time to snatch these units up?

Here's some of the reasons why I don't think its time;

1. Values are still declining.

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. The number of foreclosures in the project may affect or prohibit 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.
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 foreclosures , and
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