Florida Preconstruction Condos
June 10, 2008
Bargains Await You!
Buying opportunities are great in today’s new and preconstruction condo market in south Florida. The imbalance between supply and demand in our market has created unprecedented downward pricing pressure on the owners of these units. Both developers and resale owners are feeling this pressure like never before. The supply of high quality condos has outstripped market demand at this time and this creates fantastic buying opportunities for the motivated buyers.
First, if you are not going to pay for your unit with your own cash then you need to seek financing preapproval asap. The recent subprime lending crisis has completely changed the home financing market and most lenders have really tightened their loan requirements. So talk to your preferred lender and get preapproval before you begin a serious search. This way you know in advance that you have the funding and the amount of funding at your disposal.
If you prefer to buy a new preconstruction condo then you should expect to provide a 10% to 30% hold deposit, depending on the complex and requirements by the lenders. Most of these projects are taking from 2 to 4 years to final completion. Due to current market conditions most of these projects have been put on hold or delayed to wait on better conditions.
Most of the great buying opportunities that I am seeing in this area are with the resale owners of new units that must now sell for personal reasons and are being forced to compete in pricing with developers who are trying to sell their remaining units or other owner/sellers in the same market area. Over the past few months I have been seeing huge discounts in some of the units. In one recent transaction a developer reduced his asking price from $3.5 million for an oceanfront unit down to $2.5 million which is the price that he sold it for! This is just one example but I see many others on a regular basis.
Therefore, I would suggest that, in this market, you look for distressed and highly motivated resale owners of these units who must sell now—at whatever the price.
