Miami Condo Market - Future Not So Bright

Commenting on the rising home prices in some metropolitan areas and further decline in home values in other areas in the fourth quarter of 2007, Lawrence Yun, National Association of Realtors® chief economist, said disruptions in the mortgage market have played a role.

According to according to the latest quarterly survey by the National Association of Realtors®. In the condo sector, metro area condominium and cooperative prices – covering changes in 59 metro areas – show the national median existing-condo price was $221,100 in the fourth quarter, essentially unchanged from $221,200 in the fourth quarter of 2006.  Thirty-three metros showed annual increases in the median condo price, including four areas with double-digit gains; 26 areas had price declines including four with double-digit drops.

Miami is among the with steep decline in condo prices. According to some estimates presently condos account for almost 69 percent of the total housing inventory in Miami while single-family houses and townhouse represented the remaining 31 percent.Not only is there excess inventory but now some lenders have blacklisted certain condo developments in Miami. BankUnited has blacklisted 160 condo developments in Miami for financing. The list includes condo buildings that haven’t even broken ground yet

Other list include Washington Mutual and Popular Mortgage.

The Club at Brickell Bay

Commom among the lists are - Vue at Brickell, The Club at Brickell Bay, Jade at Brickell Bay, Solaris at Brickell Bay and Emerald at Brickell.

Reason for blacklisting most developments on the BankUnited list was given as "High Investor Concentration & declining market value"

As more institutions start blacklisting codo projects in people looking to buy affordable dwellings in Miami would be better off looking at single family home in the suburbs rather than codos.

The strongest condo price increases were in Bismarck, N.D., where the fourth quarter price of $125,000 rose 20.8 percent from a year earlier, followed by the New Orleans-Metairie-Kenner area of Louisiana, at $173,300, up 17.8 percent, and Knoxville, Tenn., where the median condo price of $160,800 rose 10.6 percent from the fourth quarter of 2006.

Metro area median existing-condo prices in the fourth quarter ranged from $109,900 in Wichita, Kan., to $595,700 in the San Francisco-Oakland-Fremont area.  The second most expensive condo market reported was Los Angeles-Long Beach-Santa Ana, at $363,100, followed by the San Diego-Carlsbad-San Marcos area at $327,000.

Other affordable condo markets include both Indianapolis and Greensboro-High Point, N.C., at $116,700 in the fourth quarter, and the Cleveland-Elyria-Mentor area of Ohio at $120,000.

While the Federal Reserve chairman Bernanke and other economists are Optimistic that the market will pick up by late '08 the prospects for the Condo market look grim even going into 2009.