Two years ago, Miami's real estate market was hot -- red hot -- and the hype was contagious.
When ABC News shot a story about it in the fall of 2005, we called it "Boomtown Miami." Old buildings were falling to make way for new condo towers that were selling out in just a few days.
"It was very exciting. It was an adrenaline rush," Kari Fernandez, a condo sales agent, says. "We're talking almost 1,000 units sold in a week."
Investors, speculators, flippers, everyone seemed to be making staggering profits -- at least on paper -- in a matter of weeks.
Across the country, the real estate market has gone flat, but nowhere quite like here in Miami. Not that Miami is suddenly at a standstill: In the skies, flocks of building cranes compete with birds as condos race to completion. Look around, and you can see a skyline transformed, with more than 100 new condo buildings now under construction, representing about 25,000 condo units due to be completed and delivered in the next 18 months or so.
But developers are avoiding new projects, focusing instead on completing construction and sales for all those buildings already under way. It's a far cry from the adrenaline-fueled boom of just two years ago.
Back when this was Boomtown -- in 2005, when ABC News did that first story -- we met a young real estate lawyer and speculator named Richard DeNapoli. He'd bought four condos worth $1 million with a $200,000 down payment. DeNapoli was banking on a $400,000 profit for his four condos.
Today, those condos are nearing completion, and his expectations are more modest.
DeNapoli has flipped his four units to other buyers, but for less than he'd hoped. Because he bought in early enough he'll make a $275,000 profit -- maybe. The worst-case scenario, he said, would be to break even or have to buy and then rent the units he speculated on.
"It's a stalemate right now," DeNapoli said, "between buyers who have a lot of supply to look at and sellers who don't want to budge on their asking prices."
Back in 2005, Jack Winston, an analyst with Goodkin consulting, saw a boom based on shaky foundations.
"The equation is that you have speculators buying units, and they're trying to flip their contract to other speculators who in turn are trying to flip their contract to other speculators," he said at the time. "Somewhere along the line, you are going to run out of speculators."
Now, Winston is saying: I told you so.
"Basically, we predicted at that time it was pretty close to a Ponzi scheme," he says. "And the last person is the one who gets hurt. And that's basically what happened here."
Winston and others estimate that 70 percent of the Miami condo market was driven by those speculators in search of quick profits.
"Probably some time around September or November of 2005, it was as if someone turned off the spigot," he says. "Since that time, new sales at condominium projects have come to a halt, practically a stand still."
Though there is an overabundance of supply, the eight hurricanes that battered this state in 2004 and 2005 can also take credit. Hurricane insurance rates have doubled, tripled. And with the inflation of property prices, so have property taxes.