When the subprime mortgage crisis hit Florida it was assumed that high-end property like South Beach condos and Miami Beach homes would be immune to value plummeting. That, of course, was a wrong assumption. Prices for all property form luxury oceanfront homes to high-rise lofts. Forbes ranked Miami Beach toward the top of the list of “foreclosure hot spots”. Foreclosures aren’t the only thing bringing real estate values down in Miami Beach. The other culprit is overbuilding that has graced the Miami Beach skyline with dozens of buildings struggling to fill every unit with a tenant or buyer. This over supply in the real estate market has also caused significant declines in the Miami Beach condo market.
Foreclosures on high-end property are of particular interest to Miami Beach real estate investors. Whether they are vulture investors, foreign investors or just a real estate investment firm Miami Beach real estate shows the promise of getting luxury homes at extremely discounted rates. To put things into perspective, many properties have dropped their value over thirty percent the last three years. For mid-range property like a $200,000 dollar condo that’s a discount of $60,000 dollars, which is a nice chunk of change. But a million dollar property would produce a discount of $300,000 dollars, which is irresistible as a long term investment.
Florida was ranked second in the nation when it comes to foreclosures. While that presents a host of problems like the fact that it will take us longer to get out of the housing crisis than most states. It’s good for investors and first time home buyers because homes are becoming increasingly more affordable. The challenges ahead for the Florida economy seem daunting, but with the right action and careful transitioning, we could see a new better real estate market within the next couple years.