Only 43 homes built in three months? Must be Miami.
In South Florida, new home construction has virtually stopped and builders and workers are struggling to survive.
It used to be a busy scene on the sidewalks of Miami’s 184th Street at dawn. Armed with lunchboxes and sun hats, day laborers once clustered here in the hundreds, awaiting pickups from building contractors eager for their energy and manual skills.Skip to next paragraph
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Away in the distance stretches the city skyline they helped build, with its luxury high-rise condo towers overlooking Biscayne Bay glinting in the morning sunlight, a lasting symbol of Miami’s once red-hot building boom.
“Construction was so good, so busy, that cars were lining up at 6 a.m. looking for workers. There would be almost 200 day laborers. Times were good,” says Selene Echeverria, director of WeCount!, a community organization that assists immigrant workers in Miami-Dade County.
But now it’s a different story. Miami’s condo bubble has burst, new home building in south Florida has virtually ground to a halt, and contractors who once cruised 184th St. looking for labor are left seeking work themselves.
“Now you don’t see more than about 20 workers waiting in the mornings,” says Ms. Echeverria. “Many have moved to other states to look for work, many of them have gone back to their home countries. We give them food or help them find other income – but it’s sad, very sad.”
While the property crash and home-construction slowdown are familiar stories across America, south Florida is at the epicenter of the crisis, its market saturated with surplus inventory.
In the first quarter of 2009, construction began on just 294 housing units in south Florida’s six-county area. In 2001, it was 20 times that number.
Broward County alone saw just two condo units and 17 single-family homes get under way in the first three months of the year. In neighboring Miami-Dade County, work was launched on just 43 single-family homes – less than one twenty-fifth of the pace set prior to the housing boom.
Nationally, new housing starts fell in the first quarter of 2009, according to census bureau data. Single-family starts numbered about 78,200 by the end of March, a drop of more than 50 percent compared with the same period last year.
“Next to Las Vegas, Miami and south Florida was probably the second area in the country to reach such a fever pitch of speculation that the bubble burst under its own weight. The bubble got the most out of control here,” Mr. Hunter explains.
Oversupply of homes
Home prices had risen from bargain to unaffordable by around 2005, but with builders slow to realize that demand was shrinking, inventory continued to mount. By the end of March 2009, there were 24,244 new condo units still awaiting buyers in south Florida’s six-county region, representing a 31-month supply. Two months supply is considered the point of equilibrium with demand.
“Now we’ve got too many homes, so of course we’ve got to stop building, let the supply absorb,” says Hunter.
That could take some time. Sales of foreclosures and other distressed properties made up half the market in the first quarter of this year, and new housing data released Wednesday suggests that may continue. The number of US households facing foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates.