Real Estate Fool's Gold

Miami has a long history of greed-fueled building booms and busts. This round is a not a lot different. It is the logical endgame in a market fueled by speculators selling to other speculators. Inevitably, the market would run out of speculators.

The situation in Miami is also a classic case of oversupply. From 1995-2005, 10,000 new condo units were built in Miami, and in the next two years another 20,000 units will be completed.

'Learn to Take Some Hits'

Retired businessman Tom Leon knows a bad deal when he sees it. He bought two condo units two years ago for $500,000 each, hoping to flip them for quick profit.

Today, as the buildings near completion, Leon is certain he couldn't he even get $400,000 for each of the units -- so he's decided to cut his losses and walk away from $200,000 in deposits rather than pay the $800,000 balance he now thinks is a bad investment.

"Listen, you can be the richest guy in the world. Nobody wants to lose a hundred grand," he said. "But in business you've got to learn to take some hits. I've made a lot of money so once in a while you've got to be smart enough…to leave when the time is right and I think now is the time."

When those cranes arrived in Miami, it seemed they were constructing towers of gold. But as more and more buildings approach completion and the cranes begin to disappear from their perches it becomes clear that for many it was a fool's gold.

The city's skyline has been transformed at great expense to those who dreamed of easy riches.

Page
  • 1
  • |
  • 2
Join the Discussion
blog comments powered by Disqus
 
You Might Also Like...
See It, Share It
United States Carli Lloyd celebrates with teammates Ali Krieger and Morgan Brian after scoring on a penalty kick against Germany during the second half of a semifinal in the Womens World Cup finals, Tuesday, June 30, 2015, in Montreal, Canada.
Ryan Remiorz/The Canadian Press via AP
PHOTO:
Elaine Thompson/AP Photo
PHOTO: In this image released by Lionsgate, Theo James, from left, Shailene Woodley and Miles Teller appear in a scene from The Divergent Series: Insurgent.
Andrew Cooper/Lionsgate/AP Photo
PHOTO: Venus and Jupiter rise together in a rare conjunction over the Robert F. Kennedy Bridge in the early morning of Aug. 18, 2014 in New York.
Stan Honda/AFP/Getty Images