The "Condominium Death Spiral"

Here's a new twist to the US housing disaster:

According to Reuters, more and more condominium buildings in Miami are facing a (using the words of a Miami Beach city official) "death spiral".

What's that?

Apparently, many condo associations are unable to collect maintenance fees from the unit owners (many of which have walked away from their mortgage). Delinquency rates of 50 % are not unusual, and in one particular building, more than 200 out of 244 condos are troubled.

That means: Either maintenance will be cut (i.e. pools will be closed, the greenery won't be watered, and the hallways won't be cleaned), or the other owners have to make up for the difference.

According to the spokesman of a condo association, some condo buildings will probably become derelict, as too many owners are walking away from their obligations.

So if you're thinking of buying a dirt-cheap Florida vacation home, better make sure you know what you're doing...