Housing crash market bubble bottom feeders Miami Herald by gimleteye

Is the Miami Herald finding its legs?

Sunday, a strong editorial supporting the strong mayor referendum. Monday, several news reports in the B section and Business, Tuesday and Wednesday, too-- all adds up to news readers want (lost though it may be in the back pages of the B section).

We’re looking at Business Monday, “Florida tourism flat after years of growth,” and the comment by an expert, “One hypothesis is that there’s a certain fatigue for Florida …” Well, yes, we have noticed the cheap perfume Florida is wearing, even if the Herald editorial board and executives have a hard time describing the scent.

On Monday in “South Florida’s Economic Outlook” one realtor is quoted, “I believe what lies ahead is we’ve finally found our bottom, we’re starting to stabilize.” And a concrete executive, “… we feel we’re bouncing along the bottom now… I think ’07 is going to finish much better than people think.”

We think differently: South Florida’s economic engines are running on the empty gauge. And not just, here, in Miami.

The Federal Reserve's luck has run out. There is no soft landing for an economy propped up for so long by low interest rates.

Sooner, rather than later, the trickle down effect from what is happening in Miami real estate markets is going to feel like what happened at Jonestown. The Flood. Not the cool aid.

For a while, it was a flood of profit.

In Miami, downtown land use lawyers like Greenberg Traurig have made more money from this century's property speculation than criminal defense lawyers made in last century's cocaine business.

That's the subtext of the Wed. story, "No quick action on growth plan."

Citizens have been complaining for years.

The impasse has gone on for so long that plenty of good citizens have packed up and left, replaced by lots of people who have no history or memory how the current state of affairs came to pass. Not even, apparently, at the Miami Herald.

We tend to be much more skeptical. We’ve heard it before.

In 2006, the farmers and builders showed fancy Powerpoint presentations that showed demand for housing on a continuous upward curve for now and forever, to persuade the County Commission to move the Urban Development Boundary.

But the UDB is only half the story.

The other half is the lack of affordable housing policies, an insulated political elite (ie. an unreformable majority of the county commission), and then--Miami, itself--and dozens of cranes quickly reaching the point of completion for condominiums that won't be occupied for many years.

In Tuesday's edition: “Killer Roads: traffic inflicts record toll on the state’s endangered panthers”, a report on the South Dade Watershed Study, (“a controversial growth-management plan would encourage development of town houses and low-rise condominiums along much of US 1 in South Miami-Dade”), and a south Dade mega-development whose plans are wobbling: these are basically stories about unsustainable growth and the inability of local government to come to grips with solutions that antagonize powerful constituencies, like the farming and building lobbies—which really are one and the same.

We're glad to read the stories in the Miami Herald: it is a welcome change but the editorial board is still playing catch up.

You haven't read many editorial in recent years, how our quality of life, and attractiveness to business and visitors, have deteriorated. Most have been on the order of shrugs, following county and city commissioners nodded and rubber-stamped developer proposal after another, without much objection from the city's only daily newspaper.

Last year Herald executives, preparing for the sale of Knight Ridder, sanded the paper down to thinness of newsprint and the patience of readers wore even thinner.

Which brings us to the big story of 2007: we don’t think there is a bottom in sight for the real estate markets—it is going to be a long way down.

If foreign buyers of Miami real estate aren't pissed off with the US dollar yet, just wait a while: market psychology applies to them, too—once word spreads the condos they have to close on represent a thirty or forty percent loss, suddenly the US dollar doesn’t feel cheap: it feels like a con job.

And that is what “Mega-development falters” is about: the Lennar con job, trying to wedge another bazillion people into coastal wetlands near Biscayne National Park. No wonder the panthers are dying.

You won't hear it from the Chamber of Commerce or the Beacon Council. Here's what Angel Medina Jr., chairman of the Beacon Council, told the Herald Business section on Monday: “It’s a question of getting through this period when the people that speculated and bought houses for speculation or rentals have closed.”

Now we get it: the speculators are to blame! It is always someone else's fault, isn't it?

It may be true that a sucker is born every minute, but you can count on this: we won't be the ones to speculate about the great view from the upper deck while the ship is sinking.