The Real Deal

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How long will Miami condos sit dark?

When the Miami condo market went bust with tens of thousands of units still vacant, it fulfilled worst case predictions of a skyline full of darkened buildings.

Market forecasters are now attempting a different sort of prediction: projecting how long it will take for the market to absorb the current inventory.

There are approximately 38,000 new condos either completed or being finished in Miami-Dade County. The MLS shows 25,116 condos for sale in the county. That's about a 42-month supply, according to McCabe Research & Consulting, not counting the condos that have yet to be finished.

But that's just one take. What are brokers, attorneys and others saying about the darkened condos that are troubling the local real estate economy? There is no general consensus in the market. Some are wildly optimistic while others offer doom and gloom.

Victoria Blintser, a broker at Rapid Realty in Aventura, is more optimistic than McCabe. She believes the turnaround will take 12 to 24 months.

"With property values in South Florida taking at least a 50 percent discount, reverting back to 2004 prices, most analysts agree that we're somewhere close to the bottom of the correction," Blintser said. "However, there's still a glut of inventory in the market."

A glut indeed -- and one so bad that some industry watchers are far less optimistic than Blintser and even more pessimistic than McCabe. Michael Ross, a partner at the law firm Greenspoon Marder in Fort Lauderdale, heading up the firm's real estate, finance and transactions practices, is expecting the worst.

"Many new condo units in Miami were purchased as an investment, not to put a roof over a person's head," Ross said. "Until demand catches up with supply, which in my opinion will be between five to seven years from now, units will remain dark."

Richard Swerdlow, CEO of Condo.com, disagrees. He said he's already seen more deal flow thanks to dropping prices and lower interest rates.

"We expect to see any remaining inventory still out there on the market throughout the first half of 2009," Swerdlow said. "Many of the condo buildings that are dark, so to speak, are turning to rentals as an opportunity. This is creating a lot of positive activity as there are many people looking for condos that are not in a position to buy right now."

From her position serving the luxury market, Rapid Realty's Blintser is noticing less desperation than even a month or two ago in negotiating short sales. That signifies that a much healthier real estate market is on the horizon.

"The banking system recovery, coupled together with drops in foreclosure filings and interest rates, gives us more of a positive outlook on markets such as ours in South Florida," Blintser said.

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