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Miami's Changing Skyline: Boom Or Bust?

POSTED: Friday, March 11, 2005

The skyline of Miami is changing by the day as new condominiums go up, with thousands of new units being added this year. But the question many are asking is: Will this condo-building boom soon be a bust?

Real estate experts said many buyers are just looking for short-term profit, not a place to live. They're called "flippers" because they sell their condominium contracts before or right after they've closed for a fat profit.

But with residential estate appreciating at 20 to 25 percent a year, flipping a contract is a chance many investors are willing to take.

One large bank has just downgraded the stock of WCI, one of Florida's biggest builders, fearing that too many buyers won't be able to close on their units if the real estate bubble bursts.

In the past, most building booms in South Florida have gone bust, a recurring cycle.

But in recent years, the building boom has continued without the bottom ever falling out, and real estate developers said they don't expect that to change anytime soon.

The market is too wild for some -- like Raymond James and Associates. Company representatives said that "as much as 85 percent of all condominium sales in the downtown Miami market are accounted for by investors and speculators."

Many think that the building boom just won't hold up with those buyers behind it.

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