By Terrence McCoy
By Allie Conti
By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
Clearly, Trump's message is tightly controlled. And it needs to be. He has associated his name with five large-scale condo development projects in South Florida: Trump International Hotel & Tower in Fort Lauderdale, Trump Las Olas Beach Resort in Fort Lauderdale, Trump Hollywood, Miami Trump Towers in Sunny Isles Beach, and Trump Grande in Sunny Isles Beach.
Despite the many Trump projects in South Florida, the Donald is an investor in only Trump Las Olas and Trump International. In fact, the guy with the world's most famous comb-over has a surname with such cachet among the wealthy that he merely licensed it to the three other developments. The Trump brand, developers must believe, has a market force all its own.
Wanna live like Trump? Buy this condo!
551 N. Fort Lauderdale Beach Blvd.
Fort Lauderdale, FL 33304
Category: Hotels and Resorts
Region: Fort Lauderdale
But Trump's prime-time-TV reputation as the world's greatest capitalist aside, timing doesn't appear to be his strong suit in the subtropics. His projects are going up just as Florida's condo market once the envy of every fly-by-night, part-time real estate flipper in the nation is crashing to the pearly white sand. Condo sales are down, way down. Preconstruction investors are walking away from down payments. Mortgage companies nationwide are laying off workers, citing decreased demand for home loans. Miami-based Related Group, the developer behind Trump Hollywood and Miami Trump Towers, has already aborted plans to construct two similarly large luxury condominium towers in Las Vegas, one of the few markets whose housing bubble inflated more furiously with hot air than the one in South Florida.
Some wonder if the Sunshine State is next. And when big money pulls out, smaller money always holds the bag. And this time, big money needs a lot of bag holders.
So how do you lure them?
Hire Donald Trump and Wyclef Jean the famous faces of South Florida's biggest Ponzi scheme, er, um, condo market.
The housing market has softened.
That's the line. That is what every developer and real estate agent would like you to think that, despite this little "temporary" dip in the market, condo prices will shoot back toward the heavens in the not-so-distant future. The market is just making a slight correction, they say. But that's not what those same developers and real estate agents will tell you in private.
They know that so much air was blown into South Florida's housing bubble with incessant prices-never-go-down spiels that the market has finally popped, as dramatically and as quickly as a piece of bubble gum in the mouth of a sweaty 8-year-old at the Swap Shop.
Don't believe it? Forget for a minute about your enormous mortgage and huge home-equity loan (interest-only, of course!) and simply look at Florida's sales numbers.
From 2002 to 2004, fueled by low interest rates and investors fleeing the stock market after the crash of high-tech stocks (see a pattern?), South Florida real estate exploded, with sales increasing each year by at least 10 percent. In 2002, the median house price went up 9 percent, followed by a 13 percent increase in 2003, 17 percent in 2004, and an extraordinary 29 percent boost in 2005. During this boom, many houses east of Interstate 95 in Broward County that had sold for less than $100,000 in 2000 had sticker prices north of $300,000. People camped outside sales offices particularly in the condo-crazy downtowns of Fort Lauderdale and Hollywood to put down payments on one-bedroom units listing for $300,000 or more.
You couldn't go wrong in real estate. Or so that was the prevailing belief in South Florida.
In truth, the housing market began to decline in mid-2005 even as prices continued to go higher in the buy-or-be-left-behind fervor. June 2005 one year ago marks the start of South Florida's real estate slide. That month, total sales were down 3 percent compared to June 2004. After that, sales fluctuated erratically until December, when the market took a steep dip. Total sales in December declined 15 percent over the same period the year before.
That trend has continued all year:
January: Single-family home sales down 19 percent and condo sales down 18 percent compared to the same month in 2004.
February: Single-family home sales down 20 percent, condo sales down 23 percent.
March: Single-family home sales down 22 percent, condo sales down 23 percent.
April: Single-family home sales down 31 percent, condo sales down 37 percent.
The raw numbers are even more discouraging. In April 2005, 8,775 condos were sold statewide. One year later, in April 2006, 5,556 units changed hands. There was a dramatic sales dip not only statewide but also in Fort Lauderdale, where 873 condos sold in April compared to 1,391 units in April of last year.
Have no doubt. The housing bubble has burst.
Ask Jack McCabe, a Deerfield Beach housing analyst who heads a "vulture capital" fund, positioned to goggle up all those overpriced luxury condominium units once the market bottoms out and possibly overcorrects.
"This whole housing boom is artificial as a result of artificially low mortgage rates and exotic mortgages," McCabe says. "It gets to a certain point; then everything comes crashing back. It happens in every industry. We need to look no further than the tech bubble, which was all speculative investment. The tech bubble was fueled by the same thing that fueled the housing bubble in South Florida. It's greed, which creates this unwillingness to believe that the market can ever go down."