As Condos Rise in Florida, Investors Try to Flee / Flippers in Trouble

compare the story to this desperate "honest" agent..........

vergleicht die geschichte mit diesem "ehrlichen" makler

MIAMI, May 25 — As dozens of condominium towers conceived during Florida’s real estate boom near completion, investors who snatched up units in the preconstruction phase in hopes of turning a quick profit are increasingly trying to break contracts, even walking away from fat deposits.


“Motivated” sellers are flooding online forums like Craigslist with advertisements for condo units still months or years from being finished. And lawyers have been inundated with calls from people hoping to avoid closing on units they bought during the speculative craze of 2004 and 2005.

“I get two or three of these calls a day,” said James Ryan, a lawyer in Boca Raton who said he had 40 clients looking to get out of condo contracts. One, Mr. Ryan said, abandoned a $340,000 deposit rather than close on a $1.6 million unit that lost its appeal as the market faltered.

The numbers suggest that it will only get worse. In Miami-Dade County alone, 8,000 new condo units will be completed this year and nearly 12,000 more in 2008.


But demand has dropped markedly, and people who thought they could “flip” condos — buying, then selling for a steep profit before construction is done — are parting with that fantasy. After years of stunning price increases — 25 percent in the West Palm Beach-Boca Raton area, for example, from March 2005 to March 2006 — condo prices have started dropping.

As a result, many buyers want out — not an easy prospect unless they are willing to forfeit the 10 percent or 20 percent they put down, from $15,000 for an inexpensive studio unit to hundreds of thousands of dollars for a waterfront penthouse. ....



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Tom Leon, a retired business executive who moved here from Illinois, said he planned to give up $200,000 in deposits on two condo units in Miami, priced at $500,000 each, after finding “no loopholes” in his contracts. He said he was not especially bitter, since he had made money flipping other properties at the height of the boom.

“I’m of the frame of mind that you have to be prepared in business or investments to take a loss,” said Mr. Leon, 72, adding that he never had any intention of living in either of the units. “There are some people that mentally can never bring themselves around to that, especially in real estate. But there’s a time to hold and a time to fold, and in my opinion, this is a time to fold.”

The condo mania of recent years also beset cities like Las Vegas, Phoenix and Washington, but while those markets are also full of resales, analysts say South Florida drew the most investors.

“Between the Latin American influence and the out-of-state buyers who have a love affair with Miami because of its ambience,” said Jack McCabe, a consultant in Deerfield Beach who tracks the South Florida housing market, “they flocked to it and pushed it to the point where about 70 percent of all sales were to investors.”.....

Getting out of real estate contracts is hard, Mr. Schlesinger said, because under state law, buyers have to prove that developers “materially” changed a project in a way that is “adverse” to the buyer. Many buyers want soaring property insurance rates to fall into that category. But a new state law says they cannot.

Gregg Covin, a developer building Ten Museum Park, a downtown high-rise overlooking Biscayne Bay, said that none of his buyers had lost down payments, but that 45 out of 200 had resold their units before closing, often at the same price they paid in 2003 and to so-called vulture investors looking to scoop up multiple units at pre-boom prices. .....

> if the "vultures" are buying now or to 2003 prices they are no vultures.....

> wenn die sog. "geierfonds" jetzt im markt sind oder zu 2003 er preisen kaufen sind die sicher nicht mehr lange im geschäft und verdienen ihren namen nicht.....

Still, the few new buildings that have opened report many units up for resale. In Blue, a downtown high-rise that opened last year, 87 of the 330 units, or 26 percent, are back on the market, according to the Multiple Listing Service. In One Miami, which also opened downtown last year, 155 of the 800 units, or 19 percent, are for sale.

“When you drive by in the daytime, they are gorgeous,” Mr. McCabe said. “But when you drive by at night, there’s no furniture on the patios and only one light on out of 10.”.....

Mark Zilbert, a real estate agent, recently started CondoSuperCenter.com (ex condoflip.com...), a clearinghouse for people willing to resell preconstruction units at their original price. He said he expected thousands of listings.

“I ask if they’d be willing to sell at their 2003 price and walk away with their deposit back,” Mr. Zilbert said. “A lot of people are saying, ‘Yes, please, yes, please, yes, please.’ ”

disclosure : short wci (condo builder in florida)

naples/ florida.com

i think this picture describes the feeling of the "flippers" that are now in big big trouble...... click on the headline to read the full stoy from the wsj.

denk das diese bild ziemlich genau die lage der "flipper/spekulanten" trifft. die lage ist ziemlich trübe. bitte auf die überschrift klicken um die volle geschichte des wsj zu lesen.

In 2005, this once-sleepy retirement haven on Florida's west coast was arguably the hottest housing market in the country.

Builders held lotteries to determine who could purchase homes in new gated communities. In the older neighborhoods, buyers were snapping up modest ranch houses and cottages soon after they were listed for sale. ......

The median home price more than doubled between 2000 and 2005, to about $482,400. ...


The frenzied run-up prompted economists at banking concern National City Corp. and the economic consulting firm Global Insight Inc. to label Naples "the most overvalued" housing market in the U.S. in the second quarter of 2005, a dubious honor it retains. .....

Today, prices are dropping, the number of unsold homes on the market has swelled to more than twice the national average and investors are scrambling to unload their properties......


At the peak of the Naples market in 2004 and 2005, as many as 50% of buyers may have been investors, local real-estate agents say. ......