South Florida Condo Buildings Buckling Under Pressure From Defaults

In South Florida, The Miami Herald reports:

• As the region's housing market sputters into the new year, a collection of largely unoccupied new towers are straining under hundreds of millions of dollars in defaulted mortgages. In the 20 buildings in Miami-Dade and Broward counties with the largest numbers of units in foreclosure, loans in default totaled more than $271.8 million, according to an analysis by Condo Vultures, a Bal Harbour real estate consulting firm and brokerage. The epicenter: Miami's financial district along Brickell Avenue, where three of the top five buildings are located. Condo Vultures' principal Peter Zalewski jokingly refers to that area as Miami's "foreclosure district.''

***

• "It reflects the speculators that were coming in and coming in hard. They all had expectations of how spectacular Brickell was going to be from an investment perspective," with its new vibe, retail and night life, Zalewski said. Others said widespread mortgage fraud, involving inflated appraisals and faux buyers, also led to the dizzying rise in defaults.

***

• Lisa Magill, a lawyer with Becker & Poliakoff, which represents community associations, said she knew of associations struggling to cover expenses because more than 10 percent of their residents were behind on fees. Unkept grounds and disruptions in services could result, she said.

For more, see Condo buildings buckle under foreclosures (South Florida’s many condo buildings began to sink under hundreds of foreclosures – and it may get worse in 2008).

Go here for other posts related to the Miami condo market problem.