Monday, June 02, 2008

You Don't Have to Be Rich to Own a Home on the Beach

Rob Rose worked with the Wall Street Journal’s Brett Arends as he took a tour through Florida's best luxury real estate deals last month. Here is an article the Brett wrote about his observations of the market in southeast Florida

Miami Beach, Fla. --Yes, this state is on sale. But how cheaply can you get a weekend home? After all, not everybody is in the market for a multimillion-dollar residence, or is ready to spend $1,000 a month on condo fees. So what kind of deals are out there now for the rest of us? The answer is that for less than $200,000 you can now get something pretty reasonable, on or near the water.

Whether you count that as value may depend on a lot of things. But these are prices not seen down here since well before the bubble.

For example, $150,000 might now get you a three-bedroom house in a distressed sale in Cape Coral, a town on the Gulf coast just north of Naples. "I've got one in a short (read distressed) sale," says local agent Joan Psarros at Re/Max. "It's 2,000 square feet, on a fresh water canal, and it has a pool. It's only a few years old – it was built in 2005."

The owner, a speculator from Connecticut, paid $275,000 for it in the boom.

Some of the best bargains are to be found in the southeastern crescent, from Miami to West Palm Beach. That's where the torrent of new homes flooding onto the market has washed all prices downstream.

In West Palm Beach, if you look hard, you can find new, upscale one-bedroom condos for less than $200,000 if you look hard. A few years ago, when they were being built, the same units were selling for nearly twice that.

You have to do serious detective work to find the best deals. Look beyond the sticker prices. There is a lot of inventory around. There's often a desperate seller.

I looked at one unit that was on the market for $225,000 – while a few floors below an almost identical apartment was being offered in a distressed sale for $175,000.

In Fort Lauderdale, the cheapest bargains are in some of the older co-ops a few blocks from the beach. I looked at some one- or two-bedroom units for around $150,000. A few years ago, they would have cost around $250,000 or more.

No, they aren't fancy. The architecture is what brokers, with some humor, call "mid-century modern." That means they were new in 1950.

But the buildings are perfectly sound, your fees may be only $200 a month, and you'll find yourself with a pool and a five-minute walk to the beach.

If you want to go 20 minutes west, $200,000 or less will buy you a brand new two-bedroom unit in a development with gyms, spas, pools and tennis courts. When they were being built, they were being sold for twice that.

But probably the cheapest deals I saw were in the historic Art Deco district of Miami Beach itself. Here you can get small one-bedroom units for well under $200,000. Some are selling for much less than that.

South Beach broker Leslie Cooper of Douglas Elliman Florida showed me a tiny one-bedroom of about 450 square feet that is being sold in a distressed sale for $139,000. You might get it for less. The owner, an artist, bought it a few years ago for $175,000 and has also fixed it up beautifully. You even get a designer bathroom, if such things matter to you.

I also looked at one-bedroom units nearby that had been completely renovated and are now being offered for about $170,000.

Lots of these places are on the market in the Art Deco area. They're a short walk from the Lincoln Road shops and restaurants and a short walk to the beach. What else are you looking for? You'll even have the New World Symphony around the corner.

At the height of the boom these prices were a lot higher. "A few years ago many of these types of units were selling for $230,000, some as high as $270,000," says Ms Cooper, the real estate broker.

By the standards of the Northeast, let alone Europe, these prices seem cheap. To those elsewhere in the country, they may not. But they are certainly a lot cheaper than they were.