Fantasy island
Commentary: Markets crash together, but recover differently

By Brett Arends, WSJ.com


MIAMI (MarketWatch) -- Fisher Island is legally part of the United States. But you have to emigrate to get there.

Security guards, wearing colonial pith helmets, inspect the photo IDs of everyone in the car before letting it onto the private ferry. You need a visa -- or at least your name has to be on a list -- to be admitted.

No wonder. Fisher is famously home to RRPs -- Really Rich People. Oprah Winfrey and Mel Brooks are among those who lived here, along with legions of hedge fund managers, Russian millionaires, and the like.

While this security is doubtless effective against casual burglars and thieves, it hasn't kept out bigger risks to wealth. Ironically some residents lost far more to that nice, respectable Bernie Madoff than they could ever have lost to any burglar.

And then there is the money lost in the real estate crash.

Buyer's market

Prices have collapsed on Fisher Island, just as they have across southern Florida. Some have halved, or worse. A few weeks ago a three-bedroom condo changed hands for $1.75 million. Back in 2006 the same place sold for $4 million. In 1990 it sold for $1.2 million. Annualized return on investment: 2%. And that's before counting the very high fees associated with living there.

Forget the snooty rigmarole for outsiders at the ferry. This is a buyer's market. About 140 condos, or one-fifth of the total on the island, are up for sale. Based on recent trends, that's a four year's supply. And 25 of these are short sales: The home is on the island but the owner is underwater. The bank will take what it can get. .............(more)

The complete piece is at: http://www.marketwatch.com/story/the-colla...