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South Florida's Housing Crisis Leaves Behind Ghost Towers

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On a recent afternoon, a 22-year-old student at the Fort Lauderdale Institute of Art was walking out her front door at Villa Medici with two tiny, feather-duster-sized dogs in tow. She moved in last November, just after the burglaries, and has been frightened by stories of the crimes.

"We are still nervous about it, to have all that stuff happen," said the woman, who declined to give her name. She and her roommates keep their doors locked and the garage shut, and she's grateful for the security guard who watches over the complex on weekends.

She was attracted to Villa Medici because it's close to the beach and the Galleria Mall. But she plans to leave when she graduates and her lease ends this fall.

"It is very quiet," she says. "I guess it would be better if more people lived here. At night, I don't like it."

Another neighbor, who was checking her mailbox near the pool, put it even more succinctly: "We have been burglarized," she said. "It's not a safe area."

Whether Villa Medici's woes can be blamed on the economy, property management, or an unfortunate location is hard to say. Stephen Ulrich, a real estate agent with Condo Vultures Realty, says location woes have cursed many projects that were planned during the boom. Developers counted on their homes benefiting from the revitalization of entire areas. Then the neighborhood face-lift never materialized. "If everything would have continued the way it was going, it would've been a great area," Ulrich says. "But unfortunately everything stopped."

In the past ten months, there have been at least 15 foreclosure filings in the 118-unit Villa Medici, according to BlockShopper South Florida. In early May, 19 townhouses were listed for sale, including several three-bedroom units listed between $161,000 and $199,000. Many were short sales, illustrating the desperation of both the owners and the banks involved, which must be willing to accept less than the original mortgage price.

No one knows how long developments such as Tao and CityPlace South Tower will be able to avoid this fate, with their prices high and buyers unwilling or unable to close. Even vulture investors, eager to snag deals in this beleaguered market, are waiting for prices to fall before they pounce. Real estate analyst McCabe estimates that it could be five years before large high-rises have more occupied units than vacancies. And it will be at least a year until prices bottom out, he says. Until then, price cuts, lease-to-own deals, and cheap rents abound.

"You can't sell 'em, you can't bulldoze 'em... all you can do is rent 'em," McCabe says.

That's good news for renters, but it means that sellers, developers, and banks will keep taking a hit. The industry that once promised riches to every novice buyer with cash to burn is getting a crash course in humility. Ads across the land read like this one for Villa Medici: "SELLER IS MOTIVATED! EVERYTHING IS NEGOTIABLE! BRING ALL OFFERS!"

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Lisa Rab
Contact: Lisa Rab

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