Boom Induced Media Euphoria
Miami’s construction boom was covered heavily by the national media. People were fascinated with the pace in which new buildings were being proposed and constructed. In mid 2005, USA Today reported on how the Miami market was hot, hotter, and hottest. By that time, the surge in construction had been gaining momentum since 2003. It wasn’t early in the game. The good news kept coming though. Also in mid 2005, NBC News aired this hyped up piece about the boom. NPR weighed in with their own boom outlook. Late in the same year, ABC News reported on the condo craze. Mind you, this was just before the downturn began.
The reports were spread far and wide and were all, for the most part, positive. Everyone seemed to be contributing to the buzz; from the Christian Science Monitor to the NY Times, CNN Money, CNBC, and Time Magazine.
Shit Hits the Fan
Then as flippers made their mass entrance into the market, the supply soared, prices began to fall, and foreclosures rose. Doom and gloom engulfed the media:
- Investors flee [NY Times]
- Boom goes bust again [New Times]
- Housing Mania will end in tears [MSN Money]
- Florida Housing Shakeout Epicenter [WSJ]
- There’s trouble — lots of it — in paradise [Time]
- Miami is #2 Most Over Priced Real Estate Market [Forbes]
- Miami is #1 Riskiest Housing Market [Forbes]
- The last speculators [Forbes]
- Boom Goes Bust [Nightline]
- Real Estate Fool’s Gold [Nightline]
- Dead Zone [Fortune]
Forbes loves us, but ABC News’ Nightline is creeping behind in second place with their Miami fascination. Unexpectedly, Time magazine is lagging behind the two, but expect a come back. It begs the question: is Miami being underestimated or was it over hyped?
Miami was not over-hyped. Nothing will be able to hold it back. It is the city of the future provided nature and nimbys cut it some slack.
I’m going to respond to this question in a later post. I know it’s prevalent in the minds of many. I suppose the media would disagree with you, but how often is the media on point?
The media. They LOVE to create the news instead of reporting it.
The Brickell, Downtown & Biscayne corridor will have a tough time. The amount units being built will create and 8-10 year supply of condos.
The over-development has “wounded” the real estate market, especially in the reference neighborhoods. It will be messy but time heals all wounds.
I agree with the media creating the news rather than covering it. Regarding the areas Kevin mentions, here are the factors that come to mind when considering the potential time frame of recovery:
- Patterns of occupation
- The effect of these patterns on the retail sector
- The general pace and type of commercial development
- Acquisition patterns near new construction
- The pace of infrastructure improvements and public space initiatives
- Last but not least, transportation initiatives and parking, which will determine the ingress and retention rate of visitors to the core.
There are many other factors but these are the principle ones that must be considered as we enter the next phase of this cycle.