This is the ninth in a series of articles exploring high-potential property markets in the U.S. amid the collapse of the real estate bubble. ― ED.
By Jane Han
NEW YORK — Sprawling sandy beaches, tropical waters and a bustling downtown with soaring skyscrapers and world-class restaurants — Welcome to Miami Beach, America’s Riviera.
With flashy wealth, sunny weather and long, long stretches of coast, Miami is the nation’s pre-eminent waterfront vacation and retirement destination.
“This is where people come to enjoy life. It’s a happy place,” says Richard Lee, a real estate agent who specializes in southern Florida properties.
Despite the area’s popularity, Miami has been one of the hardest hit with foreclosures and delinquencies in the wake of the U.S. housing crisis.
Home prices in the city have dropped more than 50 percent since the market’s peak in December 2006, according to the S&P/Case-Shiller Home Price Index.
Luxury beachfront condos are no exception, making life on vacation more affordable for buyers.
Units once priced above $1 million are now in the $600,000 to $700,000 range.
“Bargain hunters are going after bargain prices,” said James Shon at Florida Realty.
In Miami, buyers from South America and Europe have been quick to snap up condos as second homes or investment properties.
According to the National Association of Realtors, 31 percent of Florida’s home sales during the 12 months ending in March were to foreign buyers, up from 10 percent in 2007.
Experts say international buyers are playing a crucial role in putting Miami’s real estate market back on track.
“Korean investors should get into this action, too,” said Shon, adding that the ongoing strong sales activity in the region will soon translate into stable prices.
“We’re in a strange situation where activity is brisk but prices are still low.”
More than 23,000 homes and condos have traded hands in South Florida from January to May, one of the strongest five-month sales records in the nation, according to the Miami Association of Realtors.
Realtors expect prices to stay low until the remaining inventory of distressed properties is cleared.
“No one can pinpoint exactly when the market will turn around, but one thing for sure is investors need to act before then,” said Shon.
Currently, luxury two-bedroom, two-bathroom units in luxury high-rise properties, such as Trump Towers and The Caribbean on Collins Avenue, a prime spot for entertainment and dining, range from $600,000 to $800,000.
Another popular area, Tampa Bay in central Florida, is also sought after by eager buyers shopping in Florida.
“Tampa Bay is less busy and more laid back than Miami,” says Kim St. Pierre of Coldwell Banker in Tampa.
Oceanfront condos with two beds and two baths are priced from $500,000 to $700,000, with a potential to bring in about $3,000 to $4,000 in monthly rent.
“Korean investors aren’t active in the Florida real estate market but I’d say there’s good potential here like any other popular areas like Los Angeles and New York,” said St. Pierre, who advised buyers to expect at least a five-year investment plan.