Plans For More Condos in the Brickell Area(Related Group) (Miami: real estate, rental market)

[perry335654]

Plans for new South Florida condo projects count on cash from Latin America - Need To Map - MiamiHerald.com (http://www.miamiherald.com/2011/06/09/2259121/plans-for-new-south-florida-condo.html#ixzz1OsSiesuN - broken link)

[thelion]

I'm interested in whether they can pull off the buyer-financing.

Surely they will target well-off S. Americans, but these people aren't going to be stupid enough to put down huge deposits if they know they can get away with smaller deposits (the US standard according to the article.)

[doggiebus]

Foreigners are the ones with the money buying, so not surprising. This is actually good news for Miami's economy. Thanks for the link.

[boxus]

I do not think it is good news for Miami's economy at all, if mostly foreigners are buying that means just general support for the low wage sector, no multiplying effect will occur with the funds spent. This reminds me of poor nations who have large areas inhabited by rich foreigners. Tourism works better when it is the byproduct of a successful economic structure.

It would be a better indicator if our own locals were the driving force behind the purchasing. If anything, having large amounts of housing being purchased by residents outside the city just puts more pressure on the living costs here, housing prices all ready cuts exceedingly into discretionary spending here in Miami. We would probably see an economic boom if per month housing prices would drop by 20% or more. The housing bust was the best thing to happen to this place, but the prices are still way out there, especially in the rental market.

I am not against this development or of foreigners purchasing them, but I would not ever venture to consider this an economic boost of any significance. As of now, the occupancy rate for all the present condos are low though ownership is high.

I can name a dozen "economic saviors" that have sprang up around here, yet our unemployment rate is what it is.

[tallrick]

Foreign investment is the true mark of a Banana Republic. The local economy is too weak to support a middle class, so the developers court the swindlers of the world to buy here. Rest assured, condos are not good enough for real wealth. They want detached homes on waterfront lots, not some overpriced pidgeon coop. After the hurricane hits, say good bye to the condos.

[doggiebus]

One downside to selling to foreigners is this isn't their primary home most likely. So they will not be shopping, dining, etc year round. So for the shops, restaurants, businesses in the area it will not be a good thing if most of the buyers will come from outside the country. The upside is jobs will be created if they actually break ground on these projects.

[tallrick]

Personally I prefer farmland as an investment over residential real estate. Condos are nothing but shares in a corporation, and after a disaster you can end up totally broke. I am currently trying to trade a duplex I rent out for a pasture near here. It is a lot more interesting to grow and cut hay for the wealthy out east to feed their horses than to build condos for foreigners to hide their dirty money.

[boxus]

Farmland is as much impacted by events as housing is. After a disaster, your losses on farmland can be considerable, or an oversupply on the market can drive your product to negative profit ratios. It may be more interesting to cut hay (I agree it is), but that does not mean it is more profitable.

If there is more of a demand for condos than hay, people interested in profit should build condos. I seriously doubt they care where the money comes from, would you care where the money to purchase your hay comes from?

[tallrick]

At least the money for hay is not a mortgage that can be written into complex derivatives. The risk with condos is significant, as something as simple as an electrical fault can close down a building for weeks. If a farm fails it is usually not a major problem but if a condo fails it is a problem of much greater magnitude.

[c4dynamic]

if a farm fails? you mean like a cold chill? Every investment has risk. People shouldn't view their homes as investments in my opinion.