Condo Building Boom in South Florida
ALEX CHADWICK, host:
This is DAY TO DAY. I'm Alex Chadwick.
Coming up, climbing the world's tallest mountains without bottled oxygen. We'll here a dispatch from the base camp on Mt. Annapurna.
First, remember news reports last week about the ivory-billed woodpecker, thought to be extinct but recently spotted in rural Arkansas? Well, we have a report now about another species indigenous to parts of the US, the south Florida condo. This is by no means an endangered species. In fact, it is proliferating, some say, at an alarming rate. Here's DAY TO DAY's Eric Weiner.
ERIC WEINER reporting:
The south Florida condo flourishes in warmer climates and likes to feed on a diet of hard cash, preferably 20 percent down. That makes Miami the ideal breeding ground. In fact, the city's downtown has been transformed into one giant condo sanctuary.
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WEINER: Everywhere you look, there are construction cranes and bulldozers and men wearing hard hats. Seventy thousand condominium units are being built, or will be soon.
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Unidentified Man: Hey!
WEINER: Developer Gregg Covin's project is only six floors high so far, but when it's done, he says, it will be a 50-story colossus with restaurants, swimming pools and a European-style spa.
Mr. GREGG COVIN (Developer): We're going full speed to get this thing done. And we really want to be done--the Super Bowl is here in January '07, so we'd like to be open for that season.
WEINER: I mean, what do you think when you drive down Biscayne Boulevard? It's not just your project, but it's one after another after another.
Mr. COVIN: Yeah. I mean, it's just unbelievable. All this land--literally, it was like in one week in 2003, every single site got bought all of a sudden.
WEINER: Covin's project sold out in nine days. Buyers included retirees from the Northeast, Europeans taking advantage of the weak dollar and Latin Americans looking for a safe investment. All of these people, though, are buying more than just a piece of real estate; they're buying the condo lifestyle.
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WEINER: The condo lifestyle is hawked in glossy brochures and videos like this one, advertisements for buildings with names like Onyx 2, Platinum and Nirvana. Jack Winston is a real estate consultant.
Mr. JACK WINSTON (Real Estate Consultant): What they are selling you is what Miami has become. It's hip; we're cool. That's the place to be; it's where it's happening.
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WEINER: Miami has mostly shed its "Miami Vice" image as an exciting but dangerous place. City officials hope the condo boom will complete that makeover, transforming Miami's rundown neighborhoods into a vibrant downtown. But some observers are worried, worried that as many as 70 percent of the people buying the condos are speculators hoping to flip the units and make a quick buck. Jack Winston says it's a lot like the irrational exuberance that fueled the high-tech bubble of the 1990s. Each new condo project, he says, is the real estate version of an IPO.
Mr. WINSTON: And you remember what happened in the stock market whenever an IPO came out. You never cared what they manufactured, whether or not they ever made a profit, just the fact that your broker told you, `It's an IPO, it's going to up at $20 a share and by the end of the day, it'll be $50 and we'll get you out.' And that's exactly what's happening to the condominium market.
Mr. DANA MURPHY: You know, all of us have a little greed in us, I guess. Everyone wants to come down and speculate and make money.
WEINER: That's Dana Murphy, a neighborhood gadfly who believes the condo boom is bad for Miami. He doesn't blame the people buying them, though.
Mr. MURPHY: All the data that you read out here, it's very positive. You know, it's saying this is the hottest property in--almost on the whole planet. That's attractive to an investor.
WEINER: What's not so attractive, says Murphy, is the prospect of a real estate bust, as happened in Miami in the early 1980s. Or how today the dozens of new skyscrapers are dislocating entire neighborhoods, including his own. Two giant condo buildings are sprouting on Murphy's small street. He says the damage is already noticeable, starting with the trees.
Mr. MURPHY: I purchased my house to be able to come down to the bay, to be able to sit down, look at these rustic trees and to have a nice, quiet neighborhood. You hear the birds?
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Mr. MURPHY: Well, there used to be a lot more birds out here because we had the trees. I mean, it was a beautiful, beautiful area. And they've destroyed it.
WEINER: Murphy's concerns are shared by other Miami residents, yet the condo boom continues. Driving it, says real estate broker Craig Studnicky, is one basic fact.
Mr. CRAIG STUDNICKY (Real Estate Broker): People are coming to Florida, and they need to live somewhere.
WEINER: Studnicky is not worried about talk of a real estate bubble. Unlike a dot-com stock, he says, real estate is real.
Mr. STUDNICKY: At the end of the day, if there were a bubble to burst, you still have an asset; you still have a high-rise condominium with a beautiful view, with the kitchens and bathrooms that are rentable.
WEINER: Provided, of course, that some developer doesn't build a bigger condo next to yours blocking your beautiful view. It's been known to happen. Eric Weiner, NPR News, Miami.
CHADWICK: More coming up on DAY TO DAY from NPR News.