101 responses so far ↓

• 1 perez /Jan 31, 2008 at 9:11 pm  Vote:    

  The Arts District is promising. Some areas need improvement, but Biscayne Blvd’s retail and restaurants are improving; it just feels real. Great Latin American Cafe. It’s very convenient to Downtown, and the Beaches. Improvements to Omni and Midtown should also help.

  One thing I don’t like is how many roads just dead end at the Bay; the bay front road in front of Cite and Paramount Bay should have been designed to continue North along the bay.

• 2 lara /Jan 31, 2008 at 9:26 pm  Vote:    

  I guess people who live in Cite and will occupy Paramount are very happy about dead end roads. IT is more comfortable for them

• 3 Alex G /Jan 31, 2008 at 9:47 pm  Vote:    

  I think you left out a lot about Downtown. I live there now (50 Biscayne) and the amount of retail stores, financial institutions, coffee shops, restaurants, etc, are endless. I believe it’s the only place you can live right now in Miami that has access to so many places that are truly “walking distance”. It will keep getting better, no doubt, but it’s really not so bad the way it is!

• 4 Gwen /Jan 31, 2008 at 9:56 pm  Vote:    

  A very interesting map. When I am searching on foreclosures (and other real estate) in Miami, no website seems to have these particular areas. This would be helpful for real estate websites to have things readily searchable by areas such as:
  - Brickell Ave Area
  - Liberty City Area

• 5 Samir Patel /Jan 31, 2008 at 10:05 pm  Vote:    

  Downtown should become awesome once MET is fully realized. Met 3 with the whole foods and MetSquare. This should be a great bridge into Brickell from Downtown.

  Lucas, I agree with you about the Arts District (North of Paramount). This will take longer to absorb, but all the buildings including Paramount and South (Cite, Quantum, 1800 Club) should absorb quicker as they feel safer in terms of location and also investment wise. They are closest to downtown, PAC and all the retail space improvements.

  Some of the run-down houses need to be removed North but I am starting to see buyers overlooking that now to buy into direct waterfront buildings. They know eventually the homes will be removed and the area will get prettier and they just want to get into a great waterfront building with direct bay views. Not many buildings and units allow you to layup in bed and look out at your own private bayview. You can’t say this about Brickell in most cases if you are looking for a new building. In Brickell you many times will have to look between existing older buildings just to get a view of the bay. This is what makes the Arts District special. Yes it is no financial center like Brickell but I believe the views are much better.

• 6 perez /Jan 31, 2008 at 10:21 pm  Vote:    

  I must agree with Alex about the walkability/convenience of downtown. Access to the metromover is very important. Of course South and North Beach are very pedestrian-friendly.

  Which Downtown buildings have the best Bayviews? One Miami is probably awesome.

• 7 RA /Feb 1, 2008 at 12:00 am  Vote:    

  Agree about Downtown and Parkwest. These areas can only go up and once the Bicentenniel Park is fully realized Park West will shine. 3 of the 4 towers are done or just about done so the influx of new residents should spur all those other elements such as the coffe shops etc.. Park West - the Park Ave to come.

• 8 Wild Bill /Feb 1, 2008 at 12:56 am  Vote:    

  Park West neighborhood should be named Wild West. Besides the few new buildings on the fringes of Biscayne Blvd., this area consists of empty lots, vacant buildings and some of the angriest residents from cross the railroad tracks I have ever seen.
  The filth and disgusting behavior of the crowds who flock to the 24 hour club zone are a sight to be seen. Make sure you have a very large breed of dog if you want to walk around undisturbed, or be ready to fight. (glass beer bottles make good weapons)
  Police force for the entire area was six man strong. On a weekends that means one hour wait or hang up if it’s a nonemergency.
  Anything ground level will be pissed on and attacked by projectile feces. Like some other areas in Miami that still haven’t recovered from the Great Depression I give this area a 5% chance of improving.
  Maybe the impact glass will drown out the occasional gunfire that takes place up the street.

• 9 Terry /Feb 1, 2008 at 2:15 am  Vote:    

  Attn Wild Bill,

  Your description of the neighborough is scaring me off, as I am a potential buyer in Marina Blue.
  Biscayne Bd and the park look nice, you also have a metromover station right by, but it is true I have never though about all the area behind and around the Mc Arthur causeway bridge just there… It will be even worst then for Marquis which is supposed to be even higher end and sits right next to the freeway bridge !
  Anyone see improvement yet in the area ? Or should we wait for the park to be finished and the closing of all 4 towers ?

• 10 jcrimes /Feb 1, 2008 at 11:14 am  Vote:    

  “once the Bicentenniel Park is fully realized ” sorry , but that won’t be happening in the next ten years. park west is gonna be stagnant for some time…it isn’t pedestrian friendly, the area two blocks west is deplorable and won’t be improving soon and the buildings that are going up there are simply way too ahead of the economic curve.

  also, anybody hear braman speak on thursday at the federation event? he’s got an interesting lawsuit regarding the city’s intention to build el chunnel DOS (for all you heat fans).

• 11 Samir Patel /Feb 1, 2008 at 11:38 am  Vote:    

  Are any of you commenting here even locals? Or did you last visit Miami like 5 years ago or something of that effect? It is very easy to sit in front of a computer screen miles away and throw out these negative comments.

  Terry, If you are considering buying, do yourself a favor and visit the area and make your own educated decision. Don’t let these other comments deter you from exploring this area.

• 12 jcrimes /Feb 1, 2008 at 12:05 pm  Vote:    

  well samir, i’m not sure what’s inaccurate about the description of park west that has been posted here. hell, about a month ago, while at the BP on biscayne, i got a first row seat to unique miami theatre - a homeless guy taking a dump next to 900 biscayne (or was it marina blue? who cares).

  in all seriousness samir, you all keep on talking about potential…which is something different than the reality. the reality today is that park west is a dump with four new buildings going up at prices that make little sense considering who the potential market is for these properties. you harp about the amazing views these buildings offer and the amenities. well then, you’re a prisoner with a great view and a nice pool and gym if you live in “park west.”

  as for terry - i work downtown and go through “park west” every night on my way home (which is usually after 8PM, so you get a good feel for who the permanent residents are). i stand by my description (and wild bill’s much more amusing characterization). however, if you do take samir’s advice and make the trip, please bring some toilet paper for your potential neighbors.

• 13 Julio Bonilla /Feb 1, 2008 at 12:16 pm  Vote:    

  Lucas, thanks for all this info. Helpful even for locals who may not be very familiar with all of these areas.

  And I strongly agree with one aspect of Samir Patel’s post. The comments and advice of others here should be considered when deciding where to buy, however we must remember that these comments are at least in part subjective and can therefore be skewed or “biased” by the individual likes and dislikes of the person making the comment.

  In the process of deciding where to buy, there is no substitute for creating your own first hand experience by spending some time in the area and deciding if it’s right for you.

• 14 Alex G /Feb 1, 2008 at 12:53 pm  Vote:    

  I was very entertained by the posts above! (especially Wild Bill’s and jcrimes’!) LOL

  Parkwest really does have a lonnng way to go. Just park your car at the gas station between the buildings and walk around. See how much there is to do there. I would recommend you bring a friend along or a weapon (apparently toilet paper could also be a bargaining chip). Make sure to also walk across the street to the “park”. Feels like home? You decide!

  Now, (if you’re still in one piece) drive South on Biscayne to Flagler and park next to or behind 50 Biscayne. Walk down Flagler and around the area West of Biscayne Blvd. You’ll notice how many restaurants, stores, coffee shops, and financial institutions you walk by. Then cross Biscayne Blvd, passing the metro mover station, to Bayfront Park and take a ride on the balloon. Nice view, huh? Later you can walk over to Bayside for a bite to eat, a drink, and some music. See the difference?

  I don’t doubt Parkwest will one day be a great place to live, but it’s at least 5-7 years behind some of the other areas…. and in 5 years imagine what Downtown will be like??

• 15 Wild Bill /Feb 1, 2008 at 1:07 pm  Vote:    

  The locals just up the block for Park West resent the new buildings and the wealth. The alley behind clubs was renovated at a cost of $800,000. Is supposed to be a Grand Promenade. This is where most the money in the neighborhood went.(Most expensive alley in America?) Another $50,000 went in Club Space for plumbing. Good use of tax money.
  Where club alley ends at the railroad tracks is now a no parking zone. That is because hundreds of cars that parked there were broken into. The City of Miami couldn’t do anything so they just made it a no parking zone. The police and city will try to hold the line for four buildings, but from what I’ve seen I wouldn’t bet on it.
  People in South Beach are still bitching about the club noise. Park West is zoned 24/7 liquor license.
  On the plus side you can buy drugs easily. If you need money you can always rob the people who get off the Greyhound bus. The people who go the the clubs are usually won’t report vehicle burglaries and just drive off. So yes, the neighborhood does have it’s advantages. Maybe when they open a Starbucks I will move back!

• 16 peterson /Feb 1, 2008 at 2:00 pm  Vote:    

  Samir is just trying to make it sound nice so he can try and sell more. Sales aren’t a derivative of plugging away with propaganda, they come from education. Why don’t you explain to your clients that the market is going to decline and get them to buy from you in a year…instead of pushing people to buy overpriced condos now

• 17 dreaming /Feb 1, 2008 at 2:21 pm  Vote:    

  i spent 6 months on brickell key in isola. nice view, but the whole area is very sterile. there is nothing there but cars speeding in and out around the clock and a few iguanas sunning themselves below the bridge. why anyone wants to live there is beyond me.

  the new buildings downtown look nice, but aside from the pools and gyms, there is nothing else to do there. wander over to bayside market? for what? some overpriced tourist traps? the place is depressing.

  downtown? a dirty mess. not a decent store outside of macys. a couple of
  starbucks, true. but nobody there when the courthouses close up at 5.

  park west? isolated and scary. bicentennial park? what a frightening mess.

  all in all, there is nothing at ground level downtown to attract residents. it’s 10 or more years away from anything resembling even a third class city.

  btw, i live in south beach, which is also overrated unless you are a celeb or a 20 something who likes velvet ropes and clubs that don’t open till 1am.

• 18 deals /Feb 1, 2008 at 2:22 pm  Vote:    

  Lucas-

  Anyway you could update the Deals! section of the website more often? Also, if you do start to do more updates, is there anyway that you could reflect recent additions to the list on the home page of your site? Thanks again for this great webpage, we all appreciate your honest assesment of the Miami condo market.

• 19 Alex G /Feb 1, 2008 at 3:12 pm  Vote:    

  dreaming,

  Sounds like Miami is not for you…..

• 20 ZipDrugs Legal Online Pharmacy /Feb 1, 2008 at 3:30 pm  Vote:    

  Great summary.

  Do you have something similiar for the Miami Beach area, Sunny Isles, Bal Harbour etc.?
  Do you think situatuation there is as bad as in downtown Miami?

• 21 FD-Condo-Hotel-South-Beach /Feb 1, 2008 at 3:33 pm  Vote:    

  Of course Downtown is not that great now. It is still a construction site.
  I was visiting again yesterday 10 Museum Park and this building is ust great. When you invest in real estate, you don’t invest for the next 2 years. If you want that you can have some very nice opportunities in South Pointe in South Beach. But not at the same price.
  And a few years ago when the Portofino Tower was built in South Pointe, they had too to be isolated from the grim outside them. And you still have this feeling of heavy security when you go there.
  However a few years down the road, it is now one of the most wealthy and safe neighborhoods with many restaurants, etc. And the new buildings don’t even need this heavy security.
  When you see all these buildings in Miami, you have to project yourself to imagine how they will be in 10 years.
  Just check the number of people who can tell you that they could have bought tons of condos in South Beach for $20,000 many years ago. Ask them if they regret ?
  Come to Lincoln Road and imagine that a few years ago nobody wanted to come to this street. Now it is just packed day and night.
  Miami is a great city, a magic city with great appeal and I believe strongly in its future.
  Best regards.
  FD @ Condo Hotel South Beach

• 22 Mark Zilbert /Feb 1, 2008 at 4:05 pm  Vote:    

  this is the BEST blog.

• 23 jcrimes /Feb 1, 2008 at 5:03 pm  Vote:    

  projecting is one thing, but if you’re asking me to be an urban pioneer but pay good neighborhood prices in the process, that’s just absurd. really, how long do most people hold a condo for? i’ll take a guess and say less than seven years. and in the next seven years, park west will still be a bastard child of a neighborhood.

• 24 Adrian Salgado /Feb 1, 2008 at 5:20 pm  Vote:    

  The area closest to the Central Business District surrounding 50 Biscayne, The Loft Downtown, The Loft 2, One Miami and soon Everglades on the Bay and The Met is definitely way ahead of Park West as a neighborhood.

  I think that urban planners, the architects who designed those buildings, and The Related Group (is it a coincidence that 4 out of the 6 buildings mentioned above were developed by Jorge Perez’s - educated as an urban planner - group? ) did a much better job of incorporating the exterior elements and creating a pedestrian-friendlier experience.

  Add to that the neighborhood’s mix of units at various socio-economic levels and its proximity to the Miami River (still a natural resource), Class A office space, Miami-Dade College’s Downtown Campus, Bayfront Park, Bayside (they got a Hooter’s AND a Chili’s - I know “woo hoo!”), Macy’s, La Epoca, Churchill’s Barber Shop and dining establishments like La Loggia, Rigatti’s Cafe, Soya E Pomodoro, and it’s clear as day that this neighborhood is way ahead of Park West RIGHT NOW.

  Furthermore, its convenient location (much more so than Park West’s) within the Metromover’s inner loop (a la Chicago’s “the Loop”) will prove to be a major asset in the future once the area achieves its anticipated population density.

  Park West, on the other hand, has a lot of catching up to do.

  Right now Park West caters mostly to club goers who don’t live in the area and can only be seen in the wee (and not so wee) hours of Saturday and Sunday mornings. The rest of the time it’s a dead zone - pardon the expression.

  The I-395 overpass is a killer (again, sorry) for Park West as it serves as a physical and psychological barrier for pedestrians. It totally severs it from the Arsht Center and the rest of the Arts District. Keep in mind that the erection of I-395 marked the start of Overtown’s demise. As long as the I-395 remains a raised highway, it will keep Park West from fulfilling its FULL potential.

  Having the Cisneros Fontanals Art Foundation (cifo) move into the neighborhood (in the old Fight Club space) is a major step in the right direction. At one time (circa 2004), there were rumors that the Whitney Museum (of NY fame) was considering opening an annex in the neighborhood. I don’t know what the status of that is, but it’s probably safe to say that that’s not happening anytime soon, if ever.

  I did notice that the person who offered his/her warehouse space rent-free to the Whitney, has purchased several units (11 or so) at Ten Museum Park - and they’re not even the premium 01-04 lines. We’re talking 05’s, which (in my opinion) is not a very good floor plan. That should, at the very least, make you say “Hmmm”.

  I think that market forces will eventually (exactly when is anybody’s guess) make Park West the place that some envision.

  Museum Park at Bicentennial or something of that magnitude is a must for Park West to realize its potential. Without that, you’re left with nothing but pretty buildings with views (for a select few) and confusing one-way street grids to anchor an entire neighborhood.

  Nevertheless, I think that those interested in moving into these areas should experience the neighborhoods for themselves and not make their decisions based on a comment in someone’s blog.

• 25 Gerry Hussey /Feb 1, 2008 at 5:28 pm  Vote:    

  Does anyone know the current mentaility of owners of Ten Museum Park who have their Units listed? (ie: See Mark Zilbert’s website) I haven’t looked long enough to see them lowering their prices. I’m baffled when I see huge price differences for the same Line 7. Sure, there should be a slight difference for higher floors but not by as much as the $50k to $100k+ I’m seeing. Are sellers just listing them for sale just for kicks to see if any desperate buyers come by? Or do they have too much money sunk and need close to asking price? Does anyone know any current owners and have input as to what their general situations are? I’m seeing 1 bedrooms at TMP listed for more than a 2bedroom. Why would someone pay a lot more for a 1 bedroom? Any current owners care to share there thoughts on TMP?

• 26 Samir Patel /Feb 1, 2008 at 9:03 pm  Vote:    

  Peterson - first of all I don’t push anything on my clients. I sell only what my clients desire to buy. If they want to buy today, then why should they wait a year. You assume everyone has a pure investor mentality and wants to buy units at $.50 on the dollar. Even you must know that is not possible unless you are looking to do a transaction for many units and I don’t mean 5-10. I don’t waste my time on buildings which obviously will drop in value. But even you must also realize that if someone bought a unit pre-construction for $500 a sq ft that you won’t ever see that unit advertised for $300 a sq ft unless it is actually in foreclosure. Do you think these people would happily forfeit $100,000 and in some cases $200,000 to give you a property? If they had the $100k or $200k don’t you think they would be in a possition to close and just decide to wait out the market? And furthermore, read my previous comment again. I suggested that Terry visit Miami and see the buildings in person and make his own judgement and not listen to anyone’s comment here. Some of us here may be more qualified to give advice but NO ONE here can predict the future. And if you think you can - then go buy us all some lottery tickets. In addition, my clients buy the best units at a discount when other buyers are wasting their times looking for ALL of the units in ALL of the buildings to drop in value. What does it mean to me if a unit in a $700 a sq ft building just dropped to $650 if I’m not looking in that price range? I am sure my clients will be happily enjoying their properties for many years to come and they will notice units in lower floors and with not as good views selling for more than they paid.

• 27 Samir Patel /Feb 1, 2008 at 9:15 pm  Vote:    

  Gerry Hussey, without actually looking at the MLS photos, I would expect the price differences to reflect maybe raw and upgraded units. Some owners do not get it, they may dump $50-$100k into a unit and screw themselves. Sometimes a buyer just wants a great price and upgrade the unit to their own taste. Also those 2 bedrooms (06 and 07 lines) don’t have as great a view as the 1 bedroom (08 line) although do I think the view should outweigh the sq ft in this case? I don’t know just yet. I think TMP is great for the 01-04 and 08 lines. I also don’t expect TMP to really be a great address for a primary residence. I just don’t think the floorplans are practical for year-round living. For vacation use - yes it is definitely a unique building and the living spaces unique as well.

• 28 cyrus /Feb 1, 2008 at 11:31 pm  Vote:    

  samir,

  you’re a knowledgable realtor and have good insights in your posts. with all due respect, as you said ‘no one can predict the future’….i will say that in the NEAR future, prices will only go further down. if sellers can only remove the emotions and ‘hope’ out of the equation, it’s quite clear. there is just WAY too much inventory…and MUCH more to come in the next year or two. demand is close to dead for things under 2 mil (i would say things over 3 mil move better in this mkt). lack of credit which is not helped by lowered rates as far as new loans are concerned (though good for refi’s). undoubtedly we are in a recession (look at today’s payroll #…worst in almost 5 years). put down 20% and see what your carrying costs are…then compare it to the rental equivalent…still…WAY off. so unless a HUGE number of new residents arrive in miami for some reason (not investors…people who will live in the home/condo), demand will not pick up.

  having said this…maybe in 4,5,10 years…things will improve…but real estate cycles are NEVER similar to those of stock markets. if you dont get into the stock market, it could exlode tomorrow….real estate takes a LONG time to wash out.

• 29 cyrus /Feb 1, 2008 at 11:33 pm  Vote:    

  …so when you mentioned ‘predicting the future’…you’re correct, but you can certainly make a very calculated prediction - for the reasons i just mentioned. call it predicting the future or something else..

• 30 Samir Patel /Feb 2, 2008 at 12:23 am  Vote:    

  Cyrus,

  It is true I am seeing a dropoff in sales between $370,000-$1,000,000. However there are still transactions taking place, its not completely dead. Many buyers have already been waiting for 2 years for buildings to just open so now they can walk inside and see the actual views. I firmly believe that not everyone will wait another 1-2 years to make their purchase and of course the best priced units at any given time will sell.

  I am just stating that if I sell a waterfront unit for $300 per sq ft today and a similar unit priced at $400 per sq ft waits until 2 years to drop to $300 per sq ft, my buyer today still got a great deal and they can move in today thus making them happy. The deals are out there but it seems many of the commentors on this blog post as if the sky is falling. It is true no one can predict the future but of course people see the trend of downward pricing it is no secret, that doesn’t mean you can’t get a great deal on a unit today, why do you think you have Realtors out there? We have access to all of the inventory. An educated Realtor will find you what you are looking for at the price you are looking for. It is all about personal preference and taste. Not everyone wants a Trump building and is waiting for prices to go bust in a Trump building. Some want to buy because they need more space because of a new child in the family, or to be close to a family member who may have bought in a specific building, or to be closer to work. That’s all I’m saying. Based on this keep in mind that yes buyers will set the price in this market but if other buyers still will buy for the multitude of reasons out there, then expect prices to stabalize. Of course sellers are not going to leave money on the table if their neighbors just made a profit even in this market. If you are expecting a specific unit in a specific building to drop to a specific price per sq ft you may OR may not be in luck.

• 31 Mr Waverly /Feb 2, 2008 at 12:25 am  Vote:    

  To FD-Condo’s comment about South Point and Portofino Tower.
  Portafino was completed in 1996, that would be more than a few years ago and it’s average price per foot was $250,000. The area was still somewhat questionable four years later when in 2000 I purchased my first property on Ocean Dr “South Of Fifth”.. Back then there was plans to build out all of the waterfront lots with luxury towers and that they did. All of the buildings were true luxury with 190 to 331 units and each delivered in a timely fashion. Two keys to South of Fifth success is that Ocean Drive leads right into it and Ocean Drive is a part of it. Ocean Drive at the time and somewhat today is perceived as one of the most fashionable and desired addresses. I personal feel that glamour has faded although the addresses South Of Fifth still demand top dollar. The other key is the area is contained and manageable. The City Of Miami Beach repaired sidewalks, streest and planted streetscapes. Let me add a third key, FISHER ISLAND, the wealthiest enclave in the USA. South Of Fifth is a whisper away and the next best thing without being isolated on an island.
  How does any of this compare to the locations of the downtown properties? The downtown buildings will all be delivered within about a year. Thousands of units in buildings with 500, 600 and 700 units and the majority are not true luxury. At it’s back doors is the second poorest city in the USA (CNN MONEY 2007). I agree the area will improve but why the heck would you want to pay today’s prices. If you want to live there then rent at half of what it will cost you to purchase then buy when the prices are down to $250 — $300 a foot.
  As a Realtor I purchased units and sold units downtown in 2003. This was five years ago and before EVERYONE wanted in. We paid $230 to $250 a foot, a fare price for then and my opinion know. In 2004 when EVERYONE wanted in and was willing to pay $300, $400 and $500 I decided it was time to get out. Soon after I was able to secure resale contracts for my client friends and now that the buildings are closing they are receiving checks above there deposits up to $100,000. I personally received a nice check myself this week. I believe in downtown and just closed on unit that I had contracted in 2003 and paid less than $230 per foot. The price was right and the opportunity to get others in at the right price is coming.
  I suggest anyone thinking about buying for personal residence or seeking an opportunity check out the location, visit at different hours or the day and night. Sit in the lobby of the building and talk to residents.
  Then maybe you will hear the truth. Believe me I have heard the “hype,” I have been served the fancy cocktails and seen the glossy sale packages. My advice “Don’t drink the Koolaid”.
  One last note. Miami had 3,600 fillings for foreclosure in January 2008.
  I say “do the math.”

• 32 Samir Patel /Feb 2, 2008 at 12:30 am  Vote:    

  Furthermore, like most Realtors and Brokers out there I wish we could bridge the gap between sellers and buyers quicker. No one likes this stalemate.

• 33 Mr Waverly /Feb 2, 2008 at 12:34 am  Vote:    

  Sorry,, Portofino started at $250 per foot..

• 34 Samir Patel /Feb 2, 2008 at 12:41 am  Vote:    

  Mr Waverly, you say that many of the downtown buildings are not true luxury. If you try to build some of the same new buildings you get in downtown - 50 Biscayne, Marina Blue, 900, Marquis, Ten Museum Park in South Beach what would you expect to pay pre-construction? Would you even be able to find a lot to build on and get approved for with the height? Also now go into the older buildings in South Beach - Floridian, Waverly - these buildings are horrible if you are comparing to the newest downtown buildings. Would you pay $450 per sq ft to live at Floridian where you have to worry you will get some huge building assessment one day or would you rather spend the money on a unit at 900 Biscayne on one of the highest floors? Many people in South Beach are now realizing if they want to buy something totally brand new and affordable (compared to new in South Beach) they have no where else to go besides downtown and the arts district.

• 35 Dan /Feb 2, 2008 at 12:46 am  Vote:    

  This market has never been seen before. Prices went up at a ridiculous rate over the last 10 years. Now the easy financing is dead and will never return like it was….banks have lost billions and billions of dollars. The speculator frenzy is gone and will not be repeated. The number of foreclosures are the highest since the Great Depression. This is very serious stuff here. Rental rates are half the cost of ownership. The economics of the situation can not be denied. Real estate is not a momentum investment (nor are stocks really either). The supply of homes compared to demand is unprecedented. This is not just another real estate bust people.

  The housing units that were purchased as investments will decline in price at a steady pace over the next two years as the reality of the market with the high holding costs hits the “investors”. The prices will come down to match the rental rates that the market commands at present for non-owner occupied housing since the rental rates are the truest determiner of the economics of housing. As I have advised people who want to get into residential rental real estate - buy stock in apartment companies, don’t become a landlord. That was good advice then, and it is good advice now.

  Even the choice views in buildings will decline significantly. None will be spared, period. I know realtors don’t like to hear that, but it is the truth. You do not want to try to catch a falling knife here unless you don’t mind losing 20% of your equity and will actually get that much enjoyment out of the house. Right now, residential real estate is the worst investment you could make. If you can rent, then rent, you’ll be richer for it. You can not fight the economics of the situation, so why even entertain doing so….it is futile.

• 36 Dan /Feb 2, 2008 at 12:50 am  Vote:    

  At some point, people will find that they really don’t have to live in South Beach and prices will drop. The justification to pay such high prices was that you’d at least get your money back out of it, worst case scenario. Well, that is no longer the case. Realtors may try and try to hold up the market, but they can’t fight the economics of each person acting in their best interests. And a significant number will act rationally enough that prices will fall, and in many areas fall by a heck of a lot. 40% from top to bottom. It is what it is.

• 37 Samir Patel /Feb 2, 2008 at 12:56 am  Vote:    

  Why do you buy a car? To use right? Do you invest in a car to bring you a return? Everyone got into their heads that a house is a great investment. Yes for the LOOOOOOOOOOOONG term. If anyone buys today do you think they are thinking of selling in a year? I think people are a little wiser than that. Or maybe I am giving people too much credit. Not everyone is looking at real estate as a short term investment.

• 38 Samir Patel /Feb 2, 2008 at 12:58 am  Vote:    

  I think we should do a poll to find out how many here are trying to catch the bottom.

• 39 Dan /Feb 2, 2008 at 1:11 am  Vote:    

  The analogy to a car is a false one. Cars have a very limited useful life and are priced accordingly. If real estate was priced as a consumable, then the prices would be much much less. Other than the structure, land does not get consumed and remains useful. If you buy before the bottom, you will have to wait a LOOOOOOOOOOOOONG time to get to at least break even. It is reckless to not at least take into account the “investment” aspect of such a large purchase since most people don’t keep that piece of real estate until they die. You are taking the true wisdom that you buy a house to live in, not as an investment, and applying it to the current speculative investment house prices. That doesn’t work. If you buy it as a place to live in, then it should be priced accordingly…and that is at least another 20% less than current pricing. This is an unprecedented real estate market bubble and the economics of the situation clearly indicate that prices will significantly decline further. Do you really think banks would go back to those lending standards ever again? That is one thing I can guarantee won’t happen.

  In real estate, you don’t need to catch the bottom, you just need to avoid the slide. After the bottom, the increases will be gradual and you can get in then….six months after the bottom won’t hurt one bit. Do not confuse the investment behavior of the stock market with real estate…eps. when you just stated real estate is not an investment but a place to live in.

• 40 Samir Patel /Feb 2, 2008 at 1:20 am  Vote:    

  Dan, you just threw out “another 20% less than current pricing”. Of what pricing? 20% less than the units that are clearly overpriced in a building? 20% less than the lowest priced units in a building? What do you mean? It is the generalization in numbers like this which I don’t agree with. Not every unit within a building is priced the same. And not every building should be valued the same.

• 41 Lucas Lechuga /Feb 2, 2008 at 1:23 am  Vote:    

  Gerry & Samir,

  I just discovered something very, very interesting about the one bedrooms at Ten Museum Park! Samir, go into the MLS and pull up only the one bedroom units. See anything similar about the listings?

  About six weeks ago there was an investment group that bought about 15-20 one bedrooms units at Ten Museum Park. The reason why I knew this was because my client’s unit was one of the 15-20 units. His, however, was the only they bought as a resale. If you pull up closed sales at Ten Museum Park you’ll see that my listing is the only that has sold as a resale. I think they bought the rest from the developer as defaults or took over people’s contract probably giving the contract holders a small loss. My client’s unit number was 1105. I closed on that unit on January 3, 2008 and the purchase price was $295,000. It is now back on the market for $435,000, not even a month later. It appears that the other units that this investment group purchased are also back on the market listed at prices that exceed $435,000. The units all look the same. They now have finished floors, closets, and a sliding glass door. It looks like this investment group decided to finish off a bunch of these units and flip them for a big profit. I think I just answered why the one bedroom units are so close in price to the two bedroom units.

  I agree with you Samir that there are good deals for people looking to buy, not as an investment, but because they want to buy something to live in for 5+ years.

  The market won’t support more flippers though.

• 42 Dan /Feb 2, 2008 at 1:26 am  Vote:    

  Simple, the 20% is an average. Most units in a building have already been priced according to their relative values to other units in a building (after the building has been built, before it is built some factors are unknown until it is built). A poor view is already priced less than a great view. As a percentage of decline, that will average out. Although some speculators who can’t afford to hold may get desperate and sell for even less, banks may do the same.

  Why get caught up trying to justify high prices for a particular unit?

• 43 Dan /Feb 2, 2008 at 1:32 am  Vote:    

  I don’t know why people try to fight economics of situations. It is beyond your control. It didn’t work with communism. It didn’t work with prohibition.

  If you have a client that needs to sell. A 10% lose now is better than the holding costs and a 20%-30% loss later. So, price it to sell now. The market won’t appreciate for a very long time. The drivers of the false price appreciation no longer exist and won’t be coming back for an Act 2, ever.

• 44 Samir Patel /Feb 2, 2008 at 1:38 am  Vote:    

  Dan,

  I look at the MLS daily. It’s part of my job as you can tell. The thing that you have to realize is that not everyone drops their price at the same time and not everyone prices relative to each other. So averages don’t work in all cases. Not everyone listing properties for sale cares about dropping prices. Many are just throwing out their price for whatever reason - they may think their property is the best in the world, who knows. Yes I think it is foolish but that’s what happens in some cases.

• 45 Samir Patel /Feb 2, 2008 at 1:40 am  Vote:    

  Pricing is ultimately the decision of the owner. And not every owner is of the same mentality. I would venture out to say I would bet most Realtors and Brokers out there would pray for every seller to just drop the price so we can have tons of transactions flowing again but that just isn’t the case.

• 46 Samir Patel /Feb 2, 2008 at 1:42 am  Vote:    

  Lucas, good read. I just noticed that 1105. What a ride for that unit. I also heard something before TMP opened. I heard that a few of those 05’s were potentially going to be used as vacation rentals for the spa. Hear anything about this? Do you know what their condo docs say about rentals?

• 47 Lucas Lechuga /Feb 2, 2008 at 1:44 am  Vote:    

  I never heard anything about that but that was my guess when I heard about an investment group buying 15-20 units. Maybe that is why each one of them looks the same. But I’m wondering why they would even relist them. No, I don’t know what the condo docs say about rentals.

• 48 Dan /Feb 2, 2008 at 1:45 am  Vote:    

  Yes, I clearly understand the different pricing for different units. Those that “throw out their price” will get the appropriate response from the market. No interest and no offers. Real estate has costs beyond the mere purchase price. And when those costs are not offset by rising values, people will have to lower their prices. It is what it is. There simply is no urgency to buy, even for units directly on the beach.

• 49 Dan /Feb 2, 2008 at 1:51 am  Vote:    

  “Pricing is ultimately the decision of the owner.” And that is what makes markets and is “economics”. The major drivers of these enormous price increases are gone forever.

  Regarding the rentals for the spa quoted above….I hope they bought at a price that can be supported by the rentals.

  The economics also are why I don’t worry about the price of a loaf of bread. Groceries are more or less a competitive market, and the price sensitive buyers and coupon clippers do the work for me by holding down prices.

• 50 Samir Patel /Feb 2, 2008 at 1:51 am  Vote:    

  According to the Declaration of Condominium recorded in the public records 3 month minimum rentals.

• 51 Mr Waverly /Feb 2, 2008 at 2:02 am  Vote:    

  Samir, I was commenting on FD-Condo’s comparison of downtown to South Of Fifth. His comparison is pointless.
  When I mention luxury I mean true luxury. Buildings with more than 1000 sq. feet, floor to ceiling glass, large terraces, 10′ ceilings and most importantly buildings with less than 300 units. With the exception of Ten Museum Park Miami has never experienced buildings with 500, 600 and 700 units. Those numbers could prove to be a positive thing (I think so, for a good mix) or a negative thing if you are trying to be a true luxury and command top dollar. Continuum North and South, Portofino, Murano, Murano Grande and Icon are what I would consider luxury. A limited amount of units (thus creating demand) and entry level of 1/2 mil $.. Icon brought down those values. South Of Fifth should not be compared to Downtown.
  What are you talking about with cars? Everyone knows cars are not an investment unless you are paying top dollar for a collectors classic. If you want to compare cars. Why pay 100% to purchase when you could pay 30 to 40% less to rent? I think you asked the perfect question and I gave the perfect answer. Why pay 100% of anything when you can have the use and enjoyment of it for half the cost? Cost of housing vs. rent is totally out of whack. Anyone who can argue that point. I want to hear it.
  Let’s get back to housing. What is the right price? I guess it is whatever anyone wants to pay at the time of purchase. Will that same person look back and say “I should have waited, I would have saved $50K”. Maybe, maybe not. It will depend on the unit and the price. Analyst are advising in an uncertain market to go with what is certain. Will prices decline further? Uncertain. Will prices stabilize? Uncertain. What is certain is prices are declining and futures are reporting further decline.
  We are both Realtors looking out for the best interest of our clients. Our views differ and that’s OK. In the end it is our clients satisfaction and goals that matters.

• 52 Dan /Feb 2, 2008 at 2:10 am  Vote:    

  All those ads that stated — “Own for less than what paying for rent!” won’t be back for a while. I know that for certain.

• 53 Wild Bill /Feb 2, 2008 at 2:31 am  Vote:    

  Do developers hide units? Why do units that are low priced disappear and never have a recorded sale? Who are these phantom bulk crusaders who buy in a declining market? How do they get the cash to hold negative income properties? Why do they want negative income properties? Are they going to buy the remaining 20,000 units that come on the market? Why do they risk downturns swing of 20% or greater instead of waiting for prices to rise? Did they go to Wharton School of Business? Do they carry toilet paper?

• 54 Samir Patel /Feb 2, 2008 at 3:00 am  Vote:    

  As far as the car comment, I meant you buy a car because you like it, and you can USE it to get from point a to point b. When I buy a property I buy it because I like it and I can use it for various purposes. I don’t think of it as a short term investment. Yes of course it is an investment which will pay off in the long run, but I am buying to use it. In this market (sale vs rent) I would still prefer to buy my home as opposed to rent my home so I can take advantage of the tax benefit. In my eyes its less money I’m going to give to the government to piss away. Sure it is not dollar for dollar but I sleep better at night.

  Wild Bill, I have been contacted by a variety of interested parties to purchase bulk units. Sometimes, I just make a note or take down a phone number because I don’t like spending to much time on this request because many buildings haven’t begun closings yet so I can’t really structure a transaction (these deals typically wont happen unless you get defaulted units). But there are interested bulk buyers. They are hedgefunds and private family groups in my experience which are interested in buying with cash. Carrying costs are very minimal and for sure you can cover with rent in this case. Of course they are most interested in buying only the premium units should they default. Now if you consider these groups are interested in buying and holding all of the premium defaulted inventory and with cash, in my opinion inventory will become a little more tight in the premium unit market. I’m sure Lucas has been contacted by many of these funds as well. As far as buying 20,000 units. Of course they would not touch the units facing the dumpsters, they would leave those for the buyers left waiting out the market.

• 55 Dan /Feb 2, 2008 at 3:00 am  Vote: