Investors go 'condo-fishing' in florida

Miami has a new vice: condo fishing for real estate bargains…

The Wall Street Journal recently reported that Home buyers from around the U.S. and abroad are descending on Florida to buy condominiums that have suffered sharp price drops amid the housing glut, subprime-mortgage crisis and credit crunch.

Some are searching for investment properties, confident home prices will eventually rebound. Others are hunting for vacation or retirement homes. Yet pitfalls abound, and experts warn that prices could dip even further.

In hard-hit Miami-Dade County, condos originally costing as much as $1.4 million at the peak of the market now sell in some cases for $840,000, a 40 percent drop. Farther north, a coming auction at Solaire at the Plaza, a new condo tower in downtown Orlando, has set a minimum selling price of $170,000 on 24 one-bedroom units once priced as high as $296,000.

Bargains abound?

Alicia Cervera Lamadrid, chief executive of Miami real-estate firm Cervera Realty Services, commented: “This doesn’t mean bargains litter the beach or that prices are as low as some buyers hope. 

"Too many buyers call nowadays expecting to pay 50 cents on the dollar, and they’re not going to find that. For the most part, prices are back to about 2003 levels, meaning they’re down 10 percent to 40 percent, depending on building and location.

Peter Zalewski, who runs Condo Vultures, a real-estate investment consulting firm, added: “Buyers shouldn’t be seduced by big price drops alone. While buying in perennially popular areas can make sense, chasing deals in other areas may not be so wise".