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McClatchy-Tribune  05/07/2014 1:13 AM ET
Brickell condo scene feels like dej... vu [The Miami Herald :: ]

May 07--This story is part of the 'Boom, Bust & Back' series. There is an enhanced version of this story available here.

The tour bus rounded a corner near Brickell Avenue as the guide pointed to a highlight everyone got up early Saturday to see: one of the dozens of condominium towers in the works.

"Think of pre-construction condos as futures contracts," Peter Zalewski, founder of Condo Vultures and the pre-construction condo website, tells the group. "In New York, you trade stocks. In Chicago, you trade commodities. In Miami, you trade condos."

Miami's Brickell Avenue condo market has erupted into such an international sensation, condo cognoscenti Zalewski launched weekend bus tours during Art Basel for investors, Realtors and anyone intrigued enough to plunk down $75 for a fast-paced overview. The tours are so popular, he doubled their frequency to morning and afternoon and recently added a boat trip along Biscayne Bay.

Far from chastened by the last overbuilding fiasco, Miami developers are revving for a rerun. Fueled by cash-rich foreign investors, 47 condo projects are under construction east of I-95 in Miami-Dade, including eight in the Brickell area, and many more are in earlier stages.

The new construction, much of it designed by internationally prominent architects, feature cutting-edge amenities, expansive terraces with outdoor kitchens and private pools.

Prices, towers both soaring

This generation of condos is fetching even higher prices than the last boom, sometimes in the eight-figure range. In tandem, prices on existing condos have rebounded sharply from their lows before hitting a recent plateau as for-sale listings have ballooned.

In the Brickell Avenue ZIP code 33131, the median price of a condo jumped 22 percent to $415,000 in 2013 from a year earlier, according to an analysis by the Miami Herald and the Florida Center for Investigative Reporting. The median condo price is down less than 14 percent from its 2007 peak of $480,000. It has come up 60 percent from its dire 2009 bottom of $260,000.

Despite Miami's notorious condo crash, when speculators reneged on contracts for pre-construction units amid plummeting values, Brickell condos turned out to be pretty solid investments. The median price in the main Brickell ZIP code is up 44 percent since 2003 and down 14 percent from its peak.

While gut-wrenchingly volatile in price, Brickell condos generated a higher return than a single-family home in ZIP 33146 in stalwart Coral Gables. In 33146, home prices were among South Florida's most stable during the crash (falling 36 percent from peak to trough) and the median price rose 33 percent since 2003, but is still down 22 percent from the peak.

Canadian snowbird Craig Emond remembers doing the math on the Icon Brickell project in late 2010. He figured the deep-discount price of $298 a square foot was well below the replacement cost for the swank development, most of which Jorge Perez's Miami-based Related Group handed back to lenders in a settlement months earlier.

Emond, a Toronto real-estate agent, tried in vain to sway friends and acquaintances to follow him into the project, which is designed by Philippe Starck and boasts an infinity swimming pool as big as a football field. But at the time, Miami real estate looked like an abyss.

Today, Emond's fifth-floor 1-bedroom, 1-bath apartment in tower two of the project is up about 60 percent from the $293,000 he paid.

"I think without a doubt Miami has become a world-class city, quickly catching up to cities like New York and London," said Emond, who uses his place for vacation.

A 57th-floor penthouse in Icon Brickell's tower two, listed for $2 million, is under contract to close this week. The listing agent, Jose Fernandez of Keller Williams Realty in Miami Beach, wouldn't disclosed the price. But it's a tidy profit from the $1 million it fetched in July 2011 when the developer's lenders sold the 3-bedroom, 3-bath unit to a buyer who holds it, like a growing number of Miami property owners, in a


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