Estate and mortgageCondo Trends: Cash Buyers on the March for Florida Condos
Cash-laden investors are getting in line to shell out millions of dollars for beach-front condos all across the Sunshine state. Except this time, instead of just one luxury unit in South Florida for million, investors picked up 51 of the units in the One Bal Harbour complex from a bankrupt developer.
Townhall.com reports that Lumber Liquidators founder Tom D. Sullivan and Jorge Arevalo, pulled down the 51 units when the developer reorganized under bankruptcy protection. "It didn"t take 10 years of research to see it was a pretty good deal," Sullivan told Townhall.com.
Miami condos are a hotbed of bulk-buys. Condo developers built about 23,000 units (some still being built) in the last six years, according to Condo Vultures Realty principal Peter Zalewski, according to Townhall.com.
This summer, banks and developers, together, are still holding about 14,000 of those units. Since the height of the market in 2006, prices have fallen by nearly 50 percent.
The difference of this condo bazaar-buying today versus the frenzy of the mid-aughts is that this time, investors are buying and holding, with cash, and not financing under the reckless exuberance of flipping them in a few months for large profit.
Townhall.com reports Florida may be the testing ground for bulk-buying as investors watch the results from San Diego, Phoenix and Las Vegas. "If values stay depressed in troubled condo markets developers and banks could make bulk deals with cash investors at a discount to unload their unsold units."