Is it really possible to buy a luxury condominium at a more than 90% discount? If you happen to be a vulture investment fund in Miami, then the answer is yes. A recent sale in Miami demonstrates this very well. 51 units in the Regent Bal Harbour luxury condo/hotel development have just been sold to “Condo Vultures Realty,” for an average price of $32,000 each. At the peak of the market in 2005, 500 sqft units were selling for as much as $1,100 psf – or $550,000. Even the head of the company that bought the units admits that he is unlikely to see prices as high as $1,110 psf “in his life time.” (He is 39.)
Luxury condos in Miami at 90% off? Yes indeed.
I would have to agree with him there. It is hard to predict how long it might take Miami’s high-end real estate to recover, but at least this demonstrates that realistic pricing can result in sales. This is not the first deal of this type in Miami recently – in fact 8 similar “bulk deals,” have gone through lately.
Predicting the bottom of the market is always difficult, and the real estate press is full of “analysts,” who have been calling bottom since the downturn began. But – I would hazard a guess that paying 5.82% of the peak price is pretty close to bottom. How long a recovery might take in places like Miami that were heavily overbuilt is anyone’s guess, but almost certainly anyone looking to buy into this market purely as an investment needs to view it as a long term one. Although for 32k I might consider a couple for my grand kids.
