Miami Condo Glut Pushes Florida's Economy to Brink of Recession2007-07-20 00:10 (New York)
By Bob Ivry July 20 (Bloomberg) -- In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building. The oversupply will force prices down as much as 30percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody's Economy.com, who owns a home in Vero Beach, Florida. ``Florida is the epicenter for all the problems that exist in the housing industry,'' said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. ``The problems we have now are unprecedented and a lot of people will get burnt.'' Thirty-seven new high-rise condos and 20,000 new units are being built in Miami's 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research &Consulting LLC in Deerfield Beach, Florida. That's the most unsold units since McCabe began tracking sales in 2002. ``Have you been to Miami lately?'' Florida Governor Charlie Crist said at a home builders' conference last week in Orlando.``It's like we have a new state bird: the building crane.''
By Bob Ivry July 20 (Bloomberg) -- In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building. The oversupply will force prices down as much as 30percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody's Economy.com, who owns a home in Vero Beach, Florida. ``Florida is the epicenter for all the problems that exist in the housing industry,'' said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. ``The problems we have now are unprecedented and a lot of people will get burnt.'' Thirty-seven new high-rise condos and 20,000 new units are being built in Miami's 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research &Consulting LLC in Deerfield Beach, Florida. That's the most unsold units since McCabe began tracking sales in 2002. ``Have you been to Miami lately?'' Florida Governor Charlie Crist said at a home builders' conference last week in Orlando.``It's like we have a new state bird: the building crane.''
Why is this a Miami Memory? Easy, because we lived a much smaller version of this in the 1970's that took a bunch of banks down with it. However, as one pundit noted in this story, the difference is that in the 70's affordable condos were built that no one wanted to buy while in this version Unaffordable condos are being built that no one wants to buy!
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