Condos In South Florida Battered By Foreclosures

January 11th, 2008

In 2007 many condos in South Florida have taken a bad battering from foreclosures. The situation is going to get worse this year – the condos are tottering. One morning without a warning Arnold Kovelman who had rented a condo at The Club, Brickell Bay in Miami had a call from the sheriff’s office with a foreclosure notice for the landlord. Arnold is just one of the 80 residents in this luxury condo who is affected. The Club is one of the exclusive condominiums in Miami. Today the owner owes the lenders more than $42 million.

The condition of the housing market in this region is pathetic. Newly constructed unoccupied towers kissing the sky remain unoccupied, as millions are due in mortgages. There are 20 such units in Miami-Dade and Broward counties. The eye of the foreclosure storm is Brickwell Avenue, the financial hub of Miami. Of the top 5 buildings 3 are located here. Today it is referred to as the ‘foreclosure district’!

Statistics show that during the housing boom in the recent past speculators were descending in hordes in this area with high expectations about Brickwell. Its vibrations throbbed with the dream of fast bucks in its retails shops and night jiving. The mortgage firms added fuel to fire by offering easy loans. Foreclosures became inevitable as interest rates began to rise. Others who fished in murky waters were valuers who inflated the value of houses and greedy buyers. All combined to lead to dizzy number of foreclosures. Mortgage fraud became a fashion.

Relatively the number of foreclosures is not so high in Broward because there was less number of luxury condos as compared to Miami-Dade. Many around Oakland Park have a foreclosure rate of 9% - these being condo conversions. Here there are families losing homes rather than speculators. However the real estate in both counties is picking up with many bargain seekers picking up houses cheap. With the completion of construction of new units the health of market should definitely improve.

Buildings are thought to be ‘healthy’ if 10% of the units are for sale. If less then the market is for seller and if more then the day is for buyers.

The Club had 128 units for sale. Of these 30 were going in for short sale. Maintenance fees and other charges are rising as occupiers share the burden of vacant residences.

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One Response to “ Condos In South Florida Battered By Foreclosures ”

Gainesville Florida Real Estate
January 11th, 2008 at 7:17 pm

Well, a lot of these foreclosures are “investors” that got carried away, it’s not all poor families getting kicked out onto the street.

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