RISMEDIA, Jan. 15, 2008-(NYTimes.com)-Miami has had a condominium building boom over the last several years, with aggressive marketing of a flashy lifestyle and a lot of foreign buyers eager to get into the market.
Manhattan has, too.
In Miami, a lot of those buildings are now sitting empty, the units unsold, some of the first victims of the national turndown.
But that hasn’t happened in Manhattan. So, what is the difference?
There were almost as many condos built in Miami as there were in Manhattan. The difference comes in what local buyers are willing to pay.
Cushman & Wakefield, the commercial real estate brokerage firm, estimates that Manhattan will end up with 32,543 new condos from the latest boom, which began in 2005, in a borough with 737,768 total households, according to census data.
In Miami, 100,000 units were planned for all of Miami-Dade County, which has 828,944 households. But Jack McCabe, a real estate consultant in Deerfield Beach, Fla., estimates that as few as 26,000 of those have been or will be finished.
Manhattan buyers spent a median of $864,397 on condos in the third quarter of 2007, according to Prudential Douglas Elliman. The median in Miami was $346,800, according to the National Association of Realtors.
McCabe said a majority of newly built condos in Miami cost about $500,000, with many running more than $1 million each. “People who live here can’t afford these condos,” he said.
In fact, the number of condo sales in Miami dropped by 53% in November from the year before, according to data tracked by the University of Florida and the Florida Association of Realtors.
These fundamentals helped draw some foreign buyers away from Miami to Manhattan, where they felt their investments were safer.
Jacky Teplitzky, a broker for Prudential Douglas Elliman in Manhattan, found that after the credit crunch, she was flooded with calls from foreign buyers who had lost faith in the Miami market and wanted to buy in Manhattan.
“In Miami, the majority of the people are buying second homes, third homes and investment properties,” Teplitzky said. “More than 80 percent of the people who buy in Manhattan buy here to live. So the foreigners view Manhattan much more as a stable market.”
She also said Manhattan has a shrinking inventory of condos while in Miami, the numbers are rising.
“The trend in Manhattan is that we’re going down in inventory,” she said. “But the trend in Miami is going up.”