Miami Condo Mayhem

Miami Condo Mayhem MIAMI BEACH, FL - On a recent Sunday hardly felt like a city experiencing the aftermath of a real estate collapse. There were cars backed up all along Ocean Drive, pedestrians jostling for shady sidewalk space in the heat and buff bodies dancing to a thumping beat along the beach. Brokers are quick to point out that all the gloomy headlines about Miami's condominium glut and Florida's foreclosure crisis describe the situation on the other side of the causeway, not in the city of Miami Beach, especially the fashionable enclave of South Beach.

While South Beach has certainly cooled — inventory is up, prices are down, and agents say they're working harder than ever to put together deals — anyone expecting to snap up a vacation getaway with views of the Atlantic for a song better search in a much less desirable part of the state.

"I get numerous phone calls from people who want to buy in Miami Beach, but they're looking for that $58,000 condo," said Allison Cotter, an agent with Esslinger Wooten Maxwell. "You have to say to them, 'That's not here; that's over in Miami.' "

According to the Florida Association of Realtors, the median sales price for existing condominiums in the entire Miami area was $151,000 in March.

But the properties most second-home owners seek in Miami Beach — condos in luxury high-rises with views, beach access and pools — are still typically priced from $500,000 to $1 million on the low end (smaller apartments on lower floors that may need updating) and at $1 million to $5 million for the condos celebrities, athletes and moguls favor.

For instance, the former New York Mets catcher Mike Piazza has listed his three-bedroom condominium for $4.3 million, a reduction from the previous asking price of $4.9 million. Situated on the 31st floor of the Murano at Portofino near the tip of South Beach, it has panoramic views of Biscayne Bay, downtown Miami, the beach and the ocean, visible through floor-to-ceiling windows or from the wraparound terrace.

"There is no better view in the city," said Jill Hertzberg, half of the Jills, a high-end Coldwell Banker brokerage in Miami Beach. Even so, the apartment has been on the market for more than half a year — typical these days, whereas condos in prime buildings used to sell in a few weeks.

"We're starting to see deals now," Ms. Hertzberg said, citing a three-bedroom condo in the Sunset Harbour complex, with views of Miami and Biscayne Bay, that just went into contract for $810,000, after the asking price was reduced to $949,000 from $1.2 million.

"He decided he really wanted to sell, and the price changed, and we sold it," she said. "It was below the market, and that's what this is all about."

While prices have declined, they haven't dropped off a cliff in South Beach because many of the newer developments were completed, and sold, before the market shifted in 2006.

But South Beach has not entirely escaped the wave of foreclosures and short sales — deals in which the price does not cover the entire mortgage but is high enough for the lender to forgive the remaining balance — that have swept the rest of the state. An oceanfront town house is listed as a short sale at $1.7 million; it sold for $3.2 million in 2006. A bank-owned condo in a luxury high-rise, stripped of its fixtures, was purchased for $1.35 million in 2006 and is now in foreclosure at $599,900.

Some of these deals even inspire words that have not been heard much lately. "Bidding wars are developing," said Tom Bellantoni, an antiques dealer who owns a store in Stamford, Conn., but spends most of his time in Florida and has been looking at properties in Miami Beach for a year.

"I was counting on finding a foreclosure or short sale," Mr. Bellantoni said. "But what has been happening is that as prices come down everybody is trying to take advantage of the opportunities so people jump on them."

Since he hasn't found the right property in Miami Beach in his price range — up to $600,000 — he and his brother recently made an offer on a five-bedroom house in Miami, a short sale listed at $499,000.

"It's not a done deal yet because the bank has not approved it," Mr. Bellantoni said. "But I am the high bid so far." In Miami Beach, a lot of the newer luxury high-rises are clustered in the South of Fifth neighborhood at the island's southern tip. The influx of high-rises has affected sales of single-family homes in Miami Beach, which these days appeal more to full-time residents or people who spend at least half the year in the area.

"Before we had such nice condos, a lot of people would buy houses as second and third homes," said Kevin Tomlinson, an agent with Esslinger Wooten Maxwell. "But as condos became larger and more chic, you don't see that as much. That's why there's such a huge back-up of large homes for sale."

Among those homes is a renovated eight-bedroom villa on the Indian Creek Waterway with luxury amenities like his-and-her bathrooms in the master suite, a built-in coffee/espresso maker in the upstairs morning kitchen, a boat dock and Tahitian pavilions for dining and lounging around the pool. There's also an outdoor kitchen. The villa went on the market for $11 million; now it's listed at $7.9 million.

Sheri Falco, a lawyer who bought a two-bedroom bungalow with a yard near Flamingo Park in 2005, has dropped her price from $675,000 to $499,000.

"I show my house constantly, but I haven't gotten an offer yet because it's still a little bit high," she said, explaining that she doesn't want to go lower based on what she owes on her mortgage.

"I bought it at the height of the market, and I'm trying to sell it at the current low market — that's how I roll," she joked, citing efforts to chase millionaire status during the dot-com boom. "Maybe I've learned my lesson."

According to the Realtor Association of Greater Miami and the Beaches, the number of sales for the region has increased almost every month since last summer, though most of that activity is in the lower price ranges, partly because of the difficulty obtaining financing at the higher end.

These days, real estate agents talk about great deals, and for some properties that may not be far from the truth. "You can make a case that with the foreclosures, auctions and short sales on the market there are now some buying opportunities. And I haven't said that for five years," said Jack McCabe, a real estate consultant in Deerfield Beach, Fla.

But Mr. McCabe cautioned that buyers should plan to own a property for five to seven years and that condo shoppers should rigorously vet the finances of the building to ensure that the other owners are current on their association payments. At some developments that are still under construction or were only completed in the last year, buyers have been walking away from down payments and abandoning deals as they've seen the value of the units tumble.

"The Lincoln Road area is kind of the dividing line," Mr. McCabe said, referring to the pedestrian mall that crosses Miami Beach near 17th Street. "The projects that are south of there are doing O.K.; the projects that are north of there are struggling." He also suggested that the bargains aren't likely to disappear anytime soon.

"We really expect that the deals will get better over the next 12 months and there will be even more inventory to select from," he said. "It's my belief that we'll see prices drop another 10 to 15 percent, and then it's going to stay at that bottom for another couple of years."

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