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Are the good 'old days of real estate back? It appears so in Downtown Miami.
In recent weeks developers have sold hundreds of condos, in a flurry of activity they haven't seen since the peak of the housing market. Some builders are actually running out of inventory. The first building to sell out, Brickell on the River, happened quietly and quickly selling 120 units in just six weeks time.
"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," Andres Asion, with Miami Real Estate Group, told CBS4's David Sutta.
Before Asion could deposit the checks, he had sold out the entire building out; something developers in this area have not been able to do for the past three years.
So how did Asion do it?
Price. They dropped it roughly a $100 thousand under their closest competition. The final prices were half of what units sold for at the peak of the market.
"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," Asion said.
It appears other developers have taken notice.
1060 Brickell followed Brickell on the River's lead to drop prices; they've just sold out. The Ivy is expected to be next.
"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," said Peter Zalewski of Condovultures.com which constantly keeps tabs on the sales of the downtown market.
Zalewski said in recent months he's watched inventory decline rapidly. The market once had 25,000 units for sale, but as of late Zalewski believes it's down to under 9,000 units; half of which are in buildings that are empty and in some form of foreclosure. That leaves just 4500 units up for grabs.
Zalewski believes the housing market downtown may be the first to emerge out of the recession.
"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," said Zalewski.
Looking at sales it appears most are not being made to 'bulk' buyers. However Zalewski believes most are being made to foreign nationals, investors looking to flip once again in Miami real estate, and that could be a good thing or a bad thing. On the one hand, investors may be bailing out downtown Miami, renting out their units and bringing life to the area. On the other they could be making another bad gamble which could lead to another wave of downtown foreclosures.
- CBS(4) NEWS
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