While a glut of foreclosures makes South Florida a symbol for the casualties of the U.S. housing crisis, the swift recovery of the Miami housing market demonstrates the voracious taste for property that helped create it.
Miami's housing market has cycled from boom to bust to boom again at a rate that has astonished realtors, The New York Times reported. Prices are beginning to rise, buoyed by a 16 percent increase in home sales in the Miami metropolitan area. The buyers, many of them foreigners, are being opportunistic and swooping in when prices are low. As many as two-thirds of sales are in cash.
"The Brazilians walk in, they don't even negotiate," said developer Gil Dezer, who recently paid off almost half the mortgage on his Trump Towers. "It's a no-brainer for them."
Revelations about unscrupulous and potentially illegal practices by banks processing foreclosures, like initiating foreclosures without appropriate documents or employing "robo-signers" to process as many foreclosures as possible, have slowed the rate of foreclosures and granted stricken homeowners a reprieve as attorneys general negotiate a settlement with the banks. It has also benefited the wealthy investors who see an opportunity.
"Two years ago, everyone was gripped with fear," said a mortgage broker, Grant Stern. "Now investors are gripped by greed."
The Times points out that Miami's revitalized housing market does not necessarily indicater a sign of a broader recovery, given the fact that the people purchasing homes don't face the types of financial constraints that require taking out loans. Dade County foreclosure filings rose by 30 percent in June, a testament to continued struggles.