November 24, 2020

Affluent Buyers Reviving Market for Miami Homes

And yet much of Miami is gripped by a housing mania as the oversupply of distressed homes dries up and foreigners and investors swoon. Only a few years after it seemed there were so many unwanted high-rise condominiums that the only solution was to tear some of them down, there are plans to build even more.

Home sales in the metropolitan area during the first half of the year rose 16 percent from 2010 for the best spring since 2007, according to the research firm DataQuick, far outpacing the negligible growth in the rest of the country. Two-thirds of the sales were all cash.

Prices, after a brutal drop, are firming up or even increasing. During the first six months of the year, there were 439 sales for at least $2 million, up 13 percent from last year.

“People thought it would take at least a decade to get back to this point,” said Peter Zalewski, founder of Condo Vultures, a real estate consultant.

Gil Dezer, who co-developed the beachfront Trump Towers, saw 90 percent of the buyers in the project’s uncompleted second and third buildings abandon their deposits in the crash. Last week, Mr. Dezer achieved a milestone: he sold enough condos to pay off the $265 million mortgage on the property. Only about 12 percent of the apartments remain.

“The Brazilians walk in, they don’t even negotiate,” said Mr. Dezer, who said he would announce two new projects by the end of the year. “It’s a no-brainer for them.”

For more than four years, the fate of the housing market here and across the country has been closely tied to the tremendous wave of foreclosures. In some communities, more than half of all home sales were bank repossessions. These cheap, often half-destroyed properties undermined neighborhoods and accelerated the market’s descent, prompting even more owners to walk away.

But now, as new foreclosures slow and lenders are forced to let old cases languish for legal reasons, some of the regions that were worst off when foreclosures were at flood tide are much improved with the process stalled.

“People should thank the foreclosure mills,” said Mr. Zalewski, referring to the law firms that brought about freezes in foreclosures when they were caught using illegal methods. “They gave the whole market a reprieve.”

As a result, the balance between supply and demand in South Florida is shifting. In late 2008, as the financial crisis was peaking, there were 108,000 properties for sale and hardly any buyers. The region became a symbol of excess. Buyers abandoned their deposits and reneged on deals, buildings went bankrupt and squatters moved in.

Now there are fewer than 48,000 properties for sale, Condo Vultures said. And with supply diminished, homes have value again.

Whether Miami and other stricken markets like Phoenix, Las Vegas and parts of California will continue to make progress depends on the fate of the two million American households in foreclosure and another two million in severe default. The nation’s attorneys general and the Obama administration are negotiating with the top mortgage servicers for new procedures for those in trouble. If the lenders get immunity from prosecution, foreclosures might speed up and the housing market could suffer another relapse.

In the meantime, the South Florida market is busy, although it offers a problematic blueprint for a national recovery. For the traditional buyer who wants to put down no more than 20 percent, loans are somewhere between tough and impossible. Many of the sales are to investors, rich people or foreign citizens benefiting from a weak dollar.

“Two years ago, everyone was gripped with fear,” said a mortgage broker, Grant Stern. “Now investors are gripped by greed.”

Article source: http://feeds.nytimes.com/click.phdo?i=84359eac66cad9ce768226189c19d68b

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