Business, Economics and Jobs

Brazilian Home Buyers Spark a Miami Comeback

To understand the recent history of Miami's real estate market, take a look through the eyes of Brazilian-born real estate broker Hercules Pimenta, with Elite International Realty.

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I met Pimenta in 2006 at a lavish party for the opening of Miami's newest condo tower. There were fire jugglers and women adorned with body paint in bikinis dancing on tables. The party ended with fireworks filling the Miami night sky. Pimenta was a regular at these parties, buying and selling condos like stocks. Pimenta owned six condos when we met.

"Sometimes we can sell before they start construction. You make more than 100 percent profit in a few months."

Not long after, Florida became of the state's hardest hit by the housing crisis, and Miami was at the center of the storm. Miami condo prices dropped in value by about half.

I met up with a more sober Pimenta two years after the party, in March 2008. Miami was a city of empty condominium skyscrapers — monuments to a time of misguided excess. Pimenta still had his condos.

"I'm waiting for a better time to sell," he said.

Four years later, I met Pimenta again.

"I remember last time that we talked" Pimenta said with a chuckle. "Well I sold some of them (condos). I am getting a very good return on my investment."

Miami's downtown condo prices have climbed about 7 percent a year from the lows of the crash. That's still a long ways off from peak prices. And the nights of wild real estate parties are pretty well over.

"It was fun, we miss it. Trust me, we miss it," said Daniel Ickowicz, the director of sales for Elite International Realty. Ickowicz, who is also from Brazil, says the boom times may be gone, but business today is brisk for one reason: Brazilian buyers.

"You know, we've worked with the Brazilian market for 20 years now. So even when they were not buying we were always trying to get the Brazilian market. But now, it just sort of exploded. (Housing) prices in Brazil are extremely high, the economy in Brazil, as you probably have read, is doing pretty well. And plus you have the favorable exchange rate."

The dollar has steadily plunged in value against the Brazilian Real over the past decade: A Real goes roughly twice as far today as it did 10 years ago.

So, think about how Miami looks to Maria Lorenzetti from Sao Paulo. She just bought a $1.7 million condo with her husband. A decade ago, that same condo would've looked like a $3.5 million dollar purchase. She likes the new pricetag… and her new condo.

"When I opened the door, the first things I saw, it was this ocean. Spectacular. Amazing. So my heart told me, buy it. And I bought."

She chose Miami for the weather, the proximity to Brazil and Miami's Latin feel. Her husband, Antonio Magalhaes is a surgeon in Brazil. As he winds down his medical career, he says he wants to enjoy the fruits of his labor. He doesn't feel secure enough to do that back home.

"If you work all your life to buy a watch, like a Rolex, you can't use this in Brazil because they come and grab you."

He says in Miami he plans to buy his dream car — an Infinity — and drive it without worry. Magalhaes paid for his condo in cash. Nearly 90 percent of Latin Americans are buying this way, according to the Miami Association of Realtors.

"Thank God, because financing is still tough," said real estate developer Inigo Ardid. "We've got great prices, but financing is tough, and US buyers typically do not pay for their homes in cash. Latin Americans are used to it, and in many cases they like it because it's a currency refuge.

Latin American currencies have a history of instability. So parking your money in a second home in Miami can be a sound investment.

Ardid is the developer behind the new downtown skyscraper, "The Mint," one of Miami's many new luxury towers. The condo comes with access to a spa, valet parking and two pools, one on the east side and one on the west, so you can always swim in the sunshine.

Ardid showed me a two-bedroom condo on the 36th floor that goes for about $360,000.

That's not the price Ardid had envisioned when construction began in 2006. Comparable condos were going for about $550,000. But Ardid is happy the units are finally getting sold. And he says developers have learned a lesson.

"Look, there's no question that we built too much too fast. But Miami is a city that a lot people from a lot of places like and that cures a lot of the excesses that we did."

But Miami is still, at heart, a city of excesses. And they're not slowing down for any silly old economic crisis.

This promotional video called "Miami 2020" shows the next vision of Miami's developers. After all, Miami's newest residents need more than just places to sleep.

(The narrator says "'Miami World Center' adds another $4 billion worth of retail, convention center hotels, and perhaps a second casino. One Bayfront Plaza will rise higher than the Empire State Building. The total is astounding.)

They're calling this future project Miami's $10 billion dollar mile.

So while the real estate developers and agents I met say the memories of Miami's condo crash are still fresh and they've learned their lesson… in Miami, the sky is still the limit.

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    Balcony at The Mint. (Photo: Mint ST Collection)

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    Hercules Pimenta (left) and Daniel Ickowicz, Elite International Realty. (Photo: Jason Margolis)

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    Real estate developer Inigo Ardid at his property, “The Mint." (Photo: Jason Margolis)