Thursday, February 03, 2005

Miami Burns With Condo Fever

Just when it seemed as if the second-home market couldn't get any barmier, it has, says this article in today's New York Times.

"Angelina Umansky... was visiting a friend in Miami two weeks ago when she heard about a new condo development downtown. Hoping to find a vacation home, but worried that others were interested, too, Ms. Umansky arrived at the sales office at 8 a.m. the day after seeing some model units.

"About 50 other buyers were already in line. Two hours later, she... had four minutes to decide which unit to buy. She acted fast, offering $350,000 for a two-bedroom, two-bathroom unit.

"Ms. Umansky thinks she got a bargain...less than eight hours later, she was told the asking price on a unit like hers had climbed to $380,000, a nearly 9 percent price increase.

"With inventories lagging behind demand and prices for new homes rising seemingly by the hour in destination cities like New York and second-home markets like Miami and Orlando, home buyers are camping out overnight in front of sales offices, pestering brokers and developers and scooping up multiple units in the real estate version of scalping.

"This is a perfect storm for a frenzied housing market," Susan Wachter, a professor of real estate at the Wharton School of the University of Pennsylvania, told The Times.

She explained: "The economy is strengthening, the restrictions on development are increasing and long-term mortgage rates are still historically low." As interest rates start to creep up, more buyers tend to pile into the market, trying to lock in good rates, she said.

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