Miami Homeowners In Formerly Rough Neighborhoods Seeing Gamble Pay Off

Many Miami real estate owners are seeing tremendous property value increases as the city remakes itself. Lisa Arthur of the Miami Herald writes that as the city progresses, reclaiming once-stately neighborhoods lost to neglect and poverty, a group of pioneers - often younger professionals with decent salaries and no kids - are starting to cash in on risks they took a few years ago. The payoffs are coming in rejuvenated neighborhoods and soaring values.

“It’s easy to be an urban pioneer when you have a badge,” said Tony Velazquez, 41, a federal law enforcement agent whose property in the 400 block of Northeast 25th Street has nearly tripled since he bought for just over $250,000 in 2000.

Despite encountering thugs who tried to rob him and his girlfriend less than a month after buying the place, he didn’t twice about his investment. Now he’s reaping the benefits, having taken the equity out of the house to buy a half-million-dollar home in Morningside, which he rents out, and a condo for his father.

• For many at the lower end of the socio-economic scale, however, the trend simply accelerates a loss of affordable housing.
• For others, buying into transitioning areas is the only way they can afford to crack the South Florida housing market, where median prices for a single-family home have doubled in the past few years.

People priced out of the “first wave” of such gentrified urban neighborhoods as Morningside, Belle Meade and Buena Vista find urban pioneering is the only way to afford the lifestyle they want. The appeal of living near such emerging urban centers as the Upper Eastside, and what many hope will become a bustling Performing Arts Center district, is what they get in exchange for potentially compromising comfort and security.

Velazquez, who describes himself as “a kid from New York who wants to be in the middle of everything,” settled in Sunrise when he moved to South Florida in 1992. That was “too suburban” and lasted only a few months. Then it was North Bay Village for six years, before he found himself craving the urban streets of his childhood. He discovered Edgewater, a neighborhood within striking distance of South Beach, Brickell and the Design District.

He didn’t balk at the news of people having been killed in the house on Northeast 25th Street, nor did the area’s reputation for drugs and crime give him pause. After all, the place was a charming three-bedroom with a fireplace, wood floors and a second-story deck with a view of Biscayne Bay. It had two detached apartments, one for his dad, the other to rent out. The neighborhood has since cleaned up nicely.

Crime is still a problem, but he says it’s still worth it.

Why? Because the Miami real estate market has gone berserk, values have skyrocketed, and no shortage of developers have discovered Velazquez’s neighborhood. His house sits in the middle of a high-rise building boom. Builders have offered him as much as $800,000 for his property.

“I think this house was a steal. I knew the value would increase, but I had no idea what was about to happen,” said Velazquez, who plans to remain in the house for the time being. “You don’t want to get boxed in by the high-rises, though. If this house is ever sold and knocked down, I will have a shot of tequila and four or five tears.”

The lesson to be learned for future Florida home loan applicants is that with the Miami makeover in full swing, cases like Velazquez’s are likely to become even more common. If you are willing to part with some of the traditional comforts of suburbia, you might be able to see significant home price appreciation in relatively little time, even as the market subsides a bit and Florida mortgage rates continue to inch upward.