Where Are The Condominium Buyers?

Mark Zilbert, a downtown Miami residential real-estate broker, remembers fondly the boom years of 2002 through 2004, when speculators—or "investors," as they called themselves—snapped up condos and other properties as fast as they could, in order to immediately re-sell them for a profit in Miami’s then red-hot real estate market.

Here in Chicago, we had a similar situation where probably about 30% or more of the condos sold between 2001 and 2006 went to so called "investors." The lucky ones bought pre construction Chicago Condo contracts and "flipped" them to other buyers for a profit. Most however, held onto these condos and a huge number are now being delivered. These condos don’t have occupants and will either have to be rented out or sold, contributing to a condo glut.

I’ve been digressing just a bit...so now back to our real estate fable.

In 2004 Zilbert founded a website, www.condoflip.com, which served as an online swap meet for pre-construction condominium contracts. But that site, like the Miami real-estate explosion that birthed it, is gone. "It just didn’t make sense in a marketplace where all you have are sellers," says Zilbert.

He now has a new site: www.condosupercenter.com - the "Sam’s Club" of Miami condominiums. "We clearly have a lot of sellers and very few buyers," admits Zilbert, though he maintains that there is still demand for projects as they grow from being construction sites to actual buildings.

The Condo Super Center’s target market is designed to help the very people who killed Miami real estate in the first place: the speculators, a group who Zilbert estimates make up 80% of the condo market. They are still doing what they always did, which is buying up condos and then re-selling them to people who actually want a place to live.

Although Zilbert says openly that "we clearly don’t have one buyer for every apartment being built," he somehow finds a way to be optimistic about this venture—though, according to the Florida Association of Realtors, Miami condo sales plummeted 24% in 2006, with prices remaining flat. He’s even opening a sales center in downtown Miami, and plans to open more.

Sales here in Chicago are down dramatically also. There’s a record amount of "inventory," especially downtown Chicago luxury condos, that are going to be delivered to market in the next several years...

• The Legacy at Millennium Park, at 18 South Michigan
• The Columbian, at 1140 South Wabash
• Lakeview Collection Lofts – A Centrum Properties Development at 3126 North Ashland (is this really Lake View?) This is how they’re describing the place...yes really..."Lakeview Collection Lofts in a European piazza right outside the door."
• R+D659, 625 West Randolph
• Trump Tower – The Donald has his name on another building...only this time it’s in Chicago. They tore down the Sun Times building on the Chicago river to build this tribute to style and good taste...hmmmm
• 550 North St Clair - in Streeterville, about 60% pre sold
• XO Condominiums, in the South Loop (do we really need more condos here?) this is a very cool looking building...architectural a+ grade.
• 50 East Chestnut, Jameson Realty are the marketing agents. 34 full floor residences.
• 11 East Walton, looking for Winter 2007 delivery
• Walton On The Park
• Glaus Haus Condos, 1327 South Wabash for Summer 2008 delivery

And, there are least sixty other developments that will be delivering Chicago Luxury Condos during the next two years. Look for our continuing coverage of the dynamic real estate market here in Chicagoland...We’ll report on suburban condos sprouting up like mushrooms after a spring rain here in the Springtime of 2007.