Experts on the South Florida real estate scene fear the spike in housing prices recalls a familiar sight: the recent bust.
Roughly 200 people attended a forum on the state of real estate at Miami’s Four Seasons Hotel yesterday. They pointed to the condominium projects backed by foreign investors paying in cash, lending plans based on the price jumps, and construction being greenlighted without the money to survive weak sales, the Miami Herald reported. During the bust, buyers forfeited their deposits instead of paying more units than they could be sold for. Prices fell hard and developers couldn’t afford to reimburse construction loans. Some are skeptical of the recent success.
“If we learned anything, we learned we didn’t learn much,” according to Russell Galbut, managing partner of Miami-based developer Crescent Heights. “What I see in the Miami market is a lot of people coming together at the same time to build. It think it could possibly bring about the same things that we had in the past, which is an overdevelopment of projects.”
In response, some panelists said this cycle will differ because lenders now demand cash deposits before investing in projects and tourists are increasingly affluent Europeans and Latin Americans.
“We have reinvented ourselves,” Alicia Cervera of Cervera Real Estate told the Herald. “One of the wonderful results of our building boom, the last one, is we in fact built a tremendous city. We have new neighborhoods, and concentrations of neighborhoods.” [Miami Herald] — Mark Maurer