During the height of the housing boom, some likened the feverish flipping game in Miami's condominium market to a circus. The circus is back, and more high-flying than ever. At a recent party to launch a new project from New York-based developer PMG, acrobats swung over the crowd, and in gravity-defying flourish, poured champagne into the glasses of wide-eyed investors. "It's exactly what we want. We wanted a little bit of show and a lot of flash," said Kevin Maloney, president of PMG, who re-entered the Miami market in 2010 to purchase some of the remaining beachfront and bayside construction sites.
Condominium development in greater Miami seems to defy not just gravity but reason. Cranes swing above the city from every angle, just as they did during the housing bubble in 2006. During the boom, 49,000 units were built as investor-flippers used easy mortgage money to swap properties and push prices. When it all came crashing down, the lights went out in Miami, literally. Tall buildings stood dark at night as banks took back properties and projects. Most thought it was all over for a good long time.
But somehow there are just 2,400 unsold units left, barely a year's worth at the current sales pace. Prices are up nearly 25 percent from a year ago, according to the Miami Area Association of Realtors. How did it happen? Foreign, all-cash buyers like Venezuelans, Russians, Chinese, Canadians and Brazilians. They were either looking for a safe-haven to park their money or were taking advantage of a weak dollar. Whatever the reason, they came, they saw, they bought.
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"It's mind boggling. I'm perplexed as to how all this can go forward this quickly," said Peter Zalewski of CondoVultures. He has been qualifying and quantifying the South Florida real estate market for over a decade and said this time around there is less short-term risk because the buyers have a real purpose. "The foreign buyer is deciding to take some chips off the table and park it up here and sort of put it away into a condo in Miami. If they use it or they don't use it, who cares, at least it's stable."
These cash-heavy buyers are allowing developers to require anywhere from 20 percent to 80 percent down, which appeases banks and private lenders alike. "It's much smaller inventory, which is holding the price point, and further, the deposit structure is much more beneficial to the developer at this point, so we're back," said PMG's Maloney.
Maloney has sold 100 of the 190 units that he plans to build in his "Echo" development, and that is without even breaking ground. The rest he hopes to entice with flash and fantasy, which is exactly what Miami is all about. "I believe in the future," said Argentinean Antonio Aguirre at the Echo party. "The prices are going to come up faster, so today is a great time to buy."
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Fifth-warmest U.S. market:Phoenix Mean winter temperature: 57.2 degrees
Phoenix's desert-like climate has long attracted lots of buyers from cold locales in the United States and Canada. "The warm weather is [key] to anyone who's looking for a second home here," says Jodi Kevern of Arizona Focus Realty in suburban Phoenix.
She says Phoenix draws lots of vacation- and retirement-property buyers from Minnesota, North Dakota and South Dakota, as well as from the Canadian provinces of Alberta, British Columbia and Saskatchewan.
"Everyone in Eastern Canada and the Northeast United States tends to travel to Florida for their warmth, so we mostly see people from the Middle and Western parts" of Canada and the United States, Kevern says.
Such out-of-town interest is combining with increased local demand to help Phoenix, which faced a massive collapse during the housing bust, rise like the phoenix of Greek mythology. Median Phoenix asking prices have risen 23.6% over the past year to hit $209,500 -- the sixth-highest percentage 12-month gain for any major U.S. city, according to Realtor.com.
The inventory of available Phoenix homes has also dropped 15.9%, as has the median number of days that Realtor.com's listings for the area have been on the market. All three of those metrics are usually signs of a rebounding market.
Fourth-warmest U.S. market:Los Angeles Mean winter temperature: 58.2 degrees
Los Angeles listings posted on Realtor.com plummeted by 41.3% over the past year, while median asking prices rose 12.3%, to $359,900. As noted previously, those are normally signs of a market rebound -- but John Capiro of Re/Max Beach Cities Realty believes L.A. housing is actually improving about as slowly as a Hollywood star in rehab.
"The market really isn't recovering," he says, adding that prices are only rising because of a freakishly low supply of available homes. Capiro says few lenders are bothering to foreclose on L.A.'s legions of delinquent borrowers, so "underwater" homeowners (those who owe more on their mortgages than their properties are now worth) have little reason to sell.
"It's a crazy market," he says. "I haven't seen anything like this before in the 27 years that I've been practicing real estate."
Third-warmest U.S. market:Orlando, Fla. Mean winter temperature: 62.1 degrees
Disney World's hometown has seen prices rise 12.8% over the past 12 months to hit $174,900, according to Realtor.com. The number of available properties listed on the site also dropped 21.9% over the past year, while the typical listing's age fell 12.3%,to 71 days compared with 108 days for the U.S. market as a whole.
Again, all three measures show that Orlando's housing sector is rebounding. "Orlando is a resort area that continues to attract people not only from around the country, but from around the world," Barbar says.
Second-warmest U.S. market:Tampa, Fla. Mean winter temperature: 62.4 degrees
Barbar says home prices in this Gulf of Mexico metro area are rebounding because it's "a coastal market that's very similar to Miami -- a port city with declining housing inventories but a good supply of [local employers]."
Median Tampa asking prices have risen 5.3% on Realtor.com over the past year to hit $150,000, while the inventory of available properties has dropped 19.3%. The median listing's age has likewise declined by 20%, to 88 days.
No. 1 warmest U.S. market:Miami Mean winter temperature: 69.6 degrees
Once the poster child for South Florida's housing bust, the Magic City is posting bigger rebound numbers these days than LeBron James and the Miami Heat. Barbar says many homes are attracting competing offers from multiple buyers, "and we expect to see solid price appreciation not only this year but over the next three or four years. All of the signs are positive."
Realtor.com found that the median Miami property's asking price has risen 7.3% over the past year to hit $285,000. The number of available properties also fell 10.1%, while the typical listing's age fell 22.3%, to 73 days.