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Doing it Florida Style

San Francisco developers are taking advantage of a change in state regulations that allow them to sell units before completion with a 3% non-refundable deposit, a technique that's part sales and part finance and which has been responsible for the huge boom in Florida. They're investing in multi-million dollar sales centers to handle the expected crowds.

While no one's saying, the likely reason for this change is the glut of condominiums on the market, selling slowly or not selling at all. The most high-profile and worrisome project being the Watermark, (shown above) where six months after opening the sales office, only thirteen units have closed escrow, or ten percent.

These new sales centers don't mean much to consumers. Keeping in mind the concept that real estate is only worth what someone actually pays for it, these sales centers (there are some exceptions, as always) will not list on the MLS, publish prices on their websites, or permit buyer representation without stringent limitations. Strictly caveat emptor, kids. Supposedly, 2700 units have yet to be built, although some days the number seems to top 5000. The closest thing we've seen so far to a bubble.

· Condo Units Selling First [SF business Journal]