Florida's overbuilt condo market starts to fizzle

Reuters reports:

On a piece of prime bayfront property near downtown Miami, weeds climb the steps of the sales office for Onyx 2, a planned waterview condo where apartments were to sell for $500,000 to $2,000,000.

A sign reads "For Sale. Land, plans and permits for Onyx 2. Includes fully equipped sales center."

Three blocks north, the land on which a glassy loft-condo called "Ice" was to rise lies idle. A realtor's Web site says: "This project has been canceled and will not be built."

Developers have pulled the plug on some of Miami's most anticipated condominium developments, a sign the city's sizzling, speculator-driven condo market -- where prices of many apartments doubled or tripled in a few brief years -- has finally chilled.

"This market was too good to be true," said Lewis Goodkin, a Miami economist and real estate analyst. "But it was a market fueled by speculators, so it wasn't a true market."

City officials say 15 condo projects, representing nearly 1,900 units, have been officially pulled from the waning market. But analysts say the numbers are much higher when you consider the rest of Florida's overbuilt condo market.

Miami's building boom, the biggest in the city's history, is far from over. Construction cranes dominate the skyline, as they have for years.

The city of Miami alone still has more than 77,000 units, in nearly 300 projects, under construction or in planning.

But the "for sale" signs are not the only warnings of a fading market.

Statewide sales of existing condos dropped 31 percent in October from the same month last year, according to the Florida Association of Realtors. Median prices fell 2 percent.

In Fort Lauderdale, sales dropped 21 percent in October.

The seller of a Miami Beach waterfront one-bedroom dropped his asking price from $445,000 to $400,000 to $370,000 in a matter of weeks.

How long will it take Miami to work through excess supply?