Category: Market Outlook

Miami Condos Auctioned Off at Half Price

Here is a story about a recent auction in Miami, Florida that gives you a good indication of the blood bath to soon follow in the housing market. A couple of years ago Miami was one of the nation’s housing hot spots. Look for other former hot spots, like Las Vegas and San Diego to be conducting auctions with
similar results.

The downturn in the US housing market will not be pretty. Even those who seem to be getting bargains now may soon wish that they had been a little slower to act. The story from Miami follows:

“There’s a large inventory of unsold condominiums in the Miami market. Economists are saying major cities like Miami and Los Angeles have been in a housing recession for the past year, the worst in 16 years.

There are at least 50 buildings under construction or nearly completed in the downtown Miami area alone, consisting of about 20,000 units.

To move inventories along, developers have gone to the auction block to get them sold.

On Thursday evening, at the Miami Biscayne Bay Marriott Hotel the gavel struck as auctioneers sold about 20 units in the 119-unit Platinum development owned by Alex Redondo.

Redondo never thought his luxury building would ever have to resort to the highest bidder.

Peter Girgoraus of Canada was one of hundreds who came to get a bargain. “I’m hoping to pick up a good property for a good price.”

The tenth largest residential lender in the US, American Home Mortgage, filed for bankruptcy this week as the mortgage industry continues to reel from troubles connected to the United States subprime home mortgage lending market.

Do not be careless in your degree of concern about financial distress in the mortgage industry. The problems extend worldwide and effect not only mortgage companies, but commercial banks, investment banks, hedge funds, stock markets, and of course investors of all sizes.

The scary thing about this financial meltdown is that the peak period of sub prime ARM mortgage reset provisions are still ahead. October is a key month for ARM resets. As additional pressure is put on the housing market due to a flood of late payments on mortgages, loan defaults, and foreclosures, a great deal of trouble and high profile bankruptcies are sure to follow.

In a situation of this seriousness you should protect yourself as fast as possible. I would suggest that you be very ruthless in evaluating your stock and real estate portfolios. Cash may prove to be a very smart holding in the months, perhaps years, ahead.

For those of you who wish to keep close tabs on the housing industry you may want to visit the National Association of Homebuilders website.

You do not have to become a member to receive various delivered by email free publications that can help you to keep up with with developments in the economy and housing market.

The NAHB website site is designed for those interested in home building and the industry - it contains resources for both members and consumers. If you are planning to purchase a new home or have a home that you may wish to sell in the near future the information on the NAHB site will prove to be of value.