Drive down Federal Highway or Sunrise Boulevard in Fort Lauderdale or Okeechobee Boulevard in West Palm Beach and the "For Sale" signs seem inescapable. Every lonely strip-mall storefront and empty condominium complex pleads to become someone else's problem.
Consider them the artifacts of a gilded age. During the past decade, South Florida's landscape was transformed by a real estate frenzy, part of the biggest home-price boom in American history. The only thing more stunning than the housing market's steep climb was its precipitous fall. According to the Florida Association of Realtors, median home sale prices in the Fort Lauderdale metro area rose by 85 percent between January 2003 and January 2006, when they hit a high of $370,500. By April of this year, that price had been cut nearly in half. Meanwhile, Palm Beach County is now facing its biggest plunge in taxable property values since the Great Depression.
Home sales, although higher than last year, are still dismally low, and foreclosures have skyrocketed. Owners saddled with giant mortgages face off against buyers who won't fork over a penny so long as prices keep falling. "Nobody wants to lend, nobody wants to spend, no one's got money," says Joseph Altschul, a local lawyer who's helping many condo buyers sue to get their deposits back.
The question on everyone's mind is: When will we hit bottom?
Of the empty homes and storefronts that dot the current landscape, high-rise condos are perhaps the most depressing. During the boom years, an endless parade of concrete towers competed for space on South Florida's skyline, but now only a sprinkling of their windows light up at night.
Miami alone has produced 23,000 new condo units since 2003 and is now experiencing the worst condo meltdown of any city in the country, according to Jack McCabe, a Deerfield Beach real estate analyst. Broward and Palm Beach counties built or permitted more than 18,000 condos. As a region, South Florida is probably the worst-hit, McCabe says.
"I think our population growth is about zero right now, and we're not creating any jobs," says McCabe. "Who is going to live in these things?"
While developers, investors, and real estate agents struggle to answer that question, the bust is taking a visible toll on condo complexes scattered throughout Broward and Palm Beach counties. Some developers appear to be in denial, masking empty units with a façade of glamorous amenities while legions of buyers file lawsuits to avoid closing on their purchases. Other developers survive by lowering their standards and their prices, accepting renters and auctioning off unsold units. Then there are complexes with so many empty units that crime has begun to invade. The resulting fear prompts more owners to flee.
A tour of some once-celebrated condo projects illuminates the misery the housing bust has caused. Welcome to condo living — after the boom.
Anybody home? Tao Sawgrass, Sunrise
The security guard is melting in the midafternoon May heat, standing sentry in the blinding white driveway of the Tao Sawgrass condos in Sunrise. In black pants, black tie, and dark shades, he mops the sweat from his forehead as he questions every car that approaches the twin condo towers. The guard, who says his name is Hugo, has only been on the job a month or so, but already he understands the routine.
Anyone who wants to ascend the winding driveway to the majestic entrance of the 26-story complex must get by Hugo first. Right now, most of the visitors are employees — the security guard at the front desk, the woman who sells the condos — because no one lives there. Not a single resident, in 396 units. "Not that I'm aware of," Hugo says.
Carolyn Van Gorder, marketing director for Hyperion Development, which is selling Tao's units, said she could not confirm or deny the presence of residents. Altschul, the lawyer representing buyers, explains that the "overwhelming" majority of original buyers were out-of-town investors who may have intended to simply flip or rent the condos without ever moving in.
Tao, which broke ground in January 2006, was supposed to attract wealthy new residents to western Broward County and the landlocked Sawgrass Mills outlet mall. The condos presold for $300,000 to $800,000, and buyers, including then-Sunrise Mayor Steven Feren, were wined and dined at the BankAtlantic Center.
"I think it's going to be a very good thing for the community," Sunrise City Commissioner Donald Rosen said optimistically in 2004. "I see this as another innovative project that will enhance the value of Sunrise."
Today the complex is an elaborate monument to the folly of the boom years, when it seemed logical to sell half-a-million-dollar high-rise units on the edge of the Everglades. Tao's twin seashell-white towers with blue-tinted accents sit in eerie silence. A fountain bubbles in the center of the circular entrance drive, surrounded by red flowers that have begun to wilt. The lobby, empty except for another security guard, is rustic-chic, with a mosaic pattern of pebbles embedded in the smooth floor and a coffee table made from a polished tree stump. The whole place seems to be holding its breath, trying not to smear its makeup while it waits for a sugar daddy to arrive.