63 responses so far ↓

• 1 Alex G /Feb 28, 2008 at 5:49 pm  Vote:    

  I wonder how long the term “break-even cash flow” will apply to some of these deals. We have to keep in mind there is also going to be an over supply of rentals which should drive rental rates down.

  Lucas, what are your thoughts on rental rates into the near future?

• 2 Lucas Lechuga /Feb 28, 2008 at 6:02 pm  Vote:    

  Rental prices will go down. I’m telling all of my investor clients to get their units rented right away and to only lock into a minimum of a 12-month lease. The longer the better. As you said, a large portion of the condos hitting the market will end up being rented out by investors turned landlords.

• 3 Margus /Feb 28, 2008 at 6:31 pm  Vote:    

  Not bad - you could rent it out for $1600 and probably pay $1250 on mortgage; then again - dont forget assoc fee ($326) and taxes ($ 6,315 / 12).

  They say its renters paradise - but can you find 2/2 1200sf+ under $1600 in Grove or Brickell?

• 4 BFG /Feb 28, 2008 at 6:59 pm  Vote:    

  I like to pronounce the “Deutsche” in Deutsche Bank as “douche” (the feminine hygiene product). I think they are the biggest bagholder in this whole mess. I see their name come up more than anyone else in these foreclosure listings.

  Anyways, yes - looks close to breakeven on the cash flow (still a little high). Still think we’ll see positive cashflow in some of these buildings at some point.

• 5 Generalmagic /Feb 28, 2008 at 7:01 pm  Vote:    

  Lucas,

  As a realtor I think that is where we are headed. Now the other people who are selling in that building will have to lower their prices! That is the trend unfortunately with foreclosures.

• 6 Julian /Feb 28, 2008 at 7:12 pm  Vote:    

  BFG - re: Deutsche. It would be nice to think that DB are the biggest bagholder but look carefully, most of the time DB are actually the Trustee/Agent for some other lender (direct or wrapped up) so it’s not actually on or off balance sheet risk

  I used to think the same but it’s not as simple as it seems.

  @Generalmagic. Fabulous eh. And why not, seems to work in almost every other country in the world that the rent and mortgage/costs are more or less a wash. Why should it be any different in the US.

• 7 Alex G /Feb 28, 2008 at 7:48 pm  Vote:    

  More and more of these will be popping up and this is going to create opportunities for those who have the cash (and cojones!) to buy during the market downturn.

  The BIG question is: How long should you wait?

  Timing is key, but I have a feeling that this is only the beginning. There are still so many new condos in the development pipeline. When that inventory hits the market, shit is really going to hit the fan!

• 8 jcrimes /Feb 28, 2008 at 7:48 pm  Vote:    

  BFG
  deutsche is just the servicer for the securitized pool. it doesn’t mean they’re eating a loss here. if anything, servicing is quite profitable - your fees get paid first before any bondholder.

• 9 Julian /Feb 28, 2008 at 8:19 pm  Vote:    

  At least someone could afford to fund this. I was just looking at a 2000 sq ft unit at the Bath Club.

  At $500 a sq ft, maintenance runs to nearly $2000 a month and taxes would be about the same. Throw in your utility bills and you’re talking $50,000 a year just to run this “home”. That’s a whole lot of pesos.

  And these things are built for 2nd homes? I think I’ll come back in 2012…

• 10 Lucas Lechuga /Feb 28, 2008 at 8:38 pm  Vote:    

  We’re now including utility bills into the mix? Wow! Don’t forget to include the expense for a maid then.

• 11 BFG /Feb 28, 2008 at 8:47 pm  Vote:    

  Regarding Deutsch Bank: you’re right - in the world of collateralized debt securitization, it’s hard to sort out who the bagholders really are. I didn’t even try, to be honest.

  However, because I have an immature sense of humor, I am still going to keep pronouncing it “Douche Bank”. It’s funnier to me.

  Anyways, anyone want to make any predictions on whether we see a lower price than this in Blue? For the record, I think we’ll see plenty of sub-$200k condos in Blue in the near future.

• 12 Julian /Feb 28, 2008 at 8:47 pm  Vote:    

  Aw Lucas - since it’s you I’ll give you a few thousand back in your pocket and call it a round $45,000

  My point is that make that kind of money work for you - not pour it down the drain.

  (actually the maid was cheaper than the utility bills, it was the butler that was pricey )

• 13 Sean /Feb 28, 2008 at 8:49 pm  Vote:    

  Lucas,

  I really don’t see this as a phenomenal deal. The unit is basically priced at 300 PSF. There’s several units which recently sold at Quantum on the Bay for close to 300 PSF. I would consider this a good deal at $250 PSF and a great deal at $200 PSF. I think we’ll be seeing many units selling at $250 PSF in 6 months and possibly sales in quality new buildings at $200 PSF in 12-18 months.

• 14 Lucas Lechuga /Feb 28, 2008 at 9:03 pm  Vote:    

  You’re right…them butlers sure are pricey these days.

• 15 Samir Patel /Feb 28, 2008 at 9:05 pm  Vote:    

  Alex - New development pipeline turning into mass foreclosures? I doubt it. I would expect if anyone doesn’t have the cojones to close or in a bad position then the developer will take back units and try to sell at the least for pre-construction pricing for the first year. They will shop the units to a bulk buyer also. A majority of the buyers sitting on the sideline today include people looking to purchase to live in the property - I believe they would be very much interested in purchasing straight from the developer a defaulted unit if being sold at original pre-construction pricing. I would expect a majority of the would be foreclosures to be the result of units purchased from flippers and priced way out of line which end up closing and far from covering the mortgage. Realize that if those buyers are smart they would just walk away prior to closing to avoid them mess (and I think some will). Those units would most likely fall back on the original contract holders (and in some cases I believe they would get to retain the defaulted buyers deposit, which would be an incentive for them to close, I’ve heard of this in one instance from a new construction building from last year) The ones getting hurt here are the buyers in-between. Buyers of a flip at the height of the market.

• 16 RG /Feb 28, 2008 at 9:20 pm  Vote:    

  Wow, I get the feeling with some of you guys that even if it was free you would still criticize the deal and wait around wanting a better deal. Guys the fact is there is a bottom some where however, where it is no one knows. We may be at it, we may not, but to keep things fair lets look at the other side of the picture. I think with the devaluation of the dollar (today we reached an all time low against the EURO) many foreigners will realize this exchange rate won’t last forever and decide to buy up big time. Miami is indeed an international hot spot. Yes, will there be people that would rather buy in the south of France, Dubai ect. of course but guess what, there are still a million other people that don’t. Secondly let’s not forget all these vulture funds popping up. Jorge Perez himself will be investing 1 billion to buy up property. Once prices fall to their liking it will snatched up and long gone before you even get a chance at putting an offer. Let’s add the falling interest rate in the mix for both saving and lending. There are many people esp. foreigners that simply save there money in bank, collecting interest not dabbling in the stock market and such. Well when all you’re getting is a measly 3.5% in the bank guess what? They’re going to start putting all that money else where! If you’re ready to buy it’s smart to wait as prices fall but how will you feel when the opportunity came and went while you were just sitting on the sidelines waiting?

• 17 Margus /Feb 28, 2008 at 9:43 pm  Vote:    

  To: RG

  You think USD can’t go lower - it will drop even lower.
  You think Obama won’t be a president - he will be the next president.
  You think we dont get hit by meteor - well, take a wild guess what is going to happen

  And don’t forget global warming - 40 years from now when all the icebergs have melted - all the new constructions in Miami will be under the water

• 18 Julian /Feb 28, 2008 at 10:02 pm  Vote:    

  Hey RG

  1. I get 6.3% on my sterling deposits, instant access (check cahoot.com, icesave etc). Take a look at short term deposit rates in all the countries you think are coming to your rescue. USD rates might be low, but hang on, you’re expecting foreigners to help you. Check out Russian, Chinese, Indian, UK, Euro and Brazilian deposit rates. Not 3.5% my friend, not even close.

  Oh and don’t forget US law requires that foreigners, when they sell their property, not only have to pay full capital gains tax but have to put 10% of the gross proceeds in escrow pending an IRS review of the sale (with few exceptions).

  So, hang on, illiquid asset, depreciating, huge cost of carry, massive penalty on sale or chug away at 6% in cash deposits, or 9-11% in a decent hedge fund of funds.

  2. Not really worried about being on the sidelines given (1) sales volumes now back at normal levels (2) 8 years of inventory (3) in 1990s in the San Fernando Valley in LA it only got to 2 years inventory

  3. Miami Beach a hotspot. Kind of. Not in the same league as South of France really (different). Holding costs much lower (fractions) in SoF and Dubai. So hotspot for vacations in hotels, not for ownership.

  4. I guess we agree - that who knows where the bottom is, who knows where Cable or EURUSD will trade in the next year or two (flip side to the bears on the USD is eventually all that inflation in emerging markets will see currency devaluations there - but that’s theoretical and years off)

  We can all get excited, and clearly we’re all interested in Miami real estate (academically or practically), but, speaking as a foreigner, don’t think we don’t have a ton of other choices or that we’re so stupid that we’ll pile into a terrible deal.

• 19 Generalmagic /Feb 28, 2008 at 10:21 pm  Vote:    

  RG,

  You purchase that condo at blue and you get what.? You barely break even as an american if you pruchase it. No way are you flipping it and making a profit. All these foreigners, I see them but few are making offers. I should say offers that represent the real listing prices. By the way if it is free I’ll take it. Holla when it gets there.

• 20 JL /Feb 28, 2008 at 10:32 pm  Vote:    

  “when the opportunity came and went while you were just sitting on the sidelines waiting?”

  Adjusted for inflation, the Miami housing market was pretty much flat from 1987 to 2001. What makes you think the market won’t be likewise flat for 14 years after hitting bottom? Wouldn’t that be the logical thing to assume, if you’re going to assume anything? There’s never been a housing bubble like this one in terms of the levels of fraud and speculation. Why shouldn’t Miami’s housing market be flat for the next 20 years, adjusted for inflation?… and what happens to all these foreign buyers that are supposedly going to save the day if the dollar starts to strengthen in a normal cyclical way? Then who buys? And if the $ does start to strengthen, do these foreign “investor/owners” who already bought now become sellers thus depressing recovery down the line? Why wouldn’t they sell if they made a tidy “profit” in a few years?

  “Jorge Perez himself will be investing 1 billion to buy up property.”

  … and I heard he was going to buy the Dolphins too. He’s too smart to come in now although he needs to talk the talk to keep up the morale in the neighborhood. Nope, if he’s as smart as people think he is, he’ll wait till the first or second wave of bulk buyers and vulture funds go belly up and feed on their mistakes.

  It sounds impressive and reassuring hearing about condo vulture funds made up of hedge funds from London, consortiums from Asia, and bulk buyers from New York… but never equate big money with brains. Now who were the geniuses buying massive amounts of the very late stage -worst of the worst- subprime CDOs… I think they were mainly hedge funds from London, consortiums from Asia, and Investment Banks from New York… See a pattern?

• 21 Lucas Lechuga /Feb 28, 2008 at 11:11 pm  Vote:    

  For those of you who aren’t local to Miami and don’t know Blue Condominium, click on the following link to view a video of a condo unit in the building. Forward to the end of the video to see the amenities. Disclaimer: the unit that you see in the video is a Penthouse unit. It is listed at $1.4M. I don’t want anyone to think that this is a typical unit in the building, because it isn’t.

  http://www.galavideos.com/videos/blue_web_Anamorpic.mov

• 22 Margus /Feb 29, 2008 at 12:21 am  Vote:    

  Even though I listed biggest disasters that can happen to SoFlo condo market - there are still peeps out there who want to own a home (or 2nd) in this area [coworker of mine just signed at a dotted line for a condo @ 205$ per SqFt]. Not a bad place to live - just so darn risky investment at the moment.

  Lucas - even though I can’t see the video - how would you go about throwing a 600K lowball at them?

• 23 Lucas Lechuga /Feb 29, 2008 at 12:29 am  Vote:    

  Margus, I wouldn’t. I know for a fact that there’s an offer of around $1.1M on the table. The seller is looking for $1.2M depending on how much furniture the buyer requests.

  $600K!!!! Come on! It’s a fully furnished Penthouse with over 3,000 square feet. Anything under $1M would just be an insult.

• 24 Craig /Feb 29, 2008 at 1:27 am  Vote:    

  How common is this? I’m considering a new construction building just completed in Broward, and I know for a fact that the developer has a bunch of units unsold and whose contract holders backed out on. I’d love to be able to get one of these at pre-construction prices, BUT being able to use the original contract holder’s deposit. Otherwise the pre-construction price is still too high. Is this common or should I forget this idea?

  “Those units would most likely fall back on the original contract holders (and in some cases I believe they would get to retain the defaulted buyers deposit, which would be an incentive for them to close, I’ve heard of this in one instance from a new construction building from last year)”

• 25 carbonblackcab /Feb 29, 2008 at 7:11 am  Vote:    

  The housing bubble has warped peoples’ perception of what a good deal is. This reminds me of when i was caugth up in the stock market bubble in 2000-2001. I had recently graduated from college and was buying stocks (YHOO, BEAS). Yhoo was over $200 at one point and when it dropped to $160, I though it was an awesome deal. I didnt have much to lose back then, but i did lose everything in the stock market. One important lesson I learned is that dont judge future value by current or short term past values.

  I drive by the Blue condo on my way to SoBe from the grove. Location is not good. Gridlock is a big problem in that area. If there is a heat game or an event at bayfront park, this area gets super gridlocked. Also, being right next to the highway is not a good thing for a residential building. For a commercial building, it is ok.

  About big money coming into condo market, I wont be holding my breath. Housing is considered toxic on wall street…no one with good sense will touch housing (at a bulk level) anytime soon. Selling condos is a messy, time consuming business. Also, bulk buyers need to hold the condos for a period of time before they flip, or rent or do something with them. So they need to buy these condos at super low prices to make a profit.

  The latest housing bubble in the early 90’s in Los Angeles took about 7 years to recover. LA has “real” industry from movies to manufacutring to high tech.

  About foreigners, there are housing bubbles in the UK, Spain, Australia and other countries. Only people who are immune to bad economy are corrupt politicians and drug dealers.

• 26 Cyrus /Feb 29, 2008 at 9:11 am  Vote:    

  carbon black cab,

  there are LOTS of corrupt politicans and drug dealers all over miami - even that hasn’t helped the real estate mkt !!

• 27 kim /Feb 29, 2008 at 9:35 am  Vote:    

  Bulk-Buying Vulture Funds = Welsh Bowmen
  Euro-fueled foreigners = Troops from France
  Sitting-on-the-sidelines renters = Irish Conscripts…

  Even if dispatched weeks ago, we all know how the Battle of York turned out for Longshanks the developer and his Condo-owning minions…

• 28 Dave /Feb 29, 2008 at 9:42 am  Vote:    

  I lived up the street from Blue, and the area around there is just horrible — homeless people sleeping next to the bay, nasty ghetto people at the Denny’s, and beggars at the Taco Bell.

  It’s also a royal pain to get in and out of the building - The infrastructure is just not there.

  I wouldn’t recommend that building or its sister - Charter Club - to my worst enemies.

• 29 Ignacio /Feb 29, 2008 at 10:01 am  Vote:    

  A little offtopic.

  What happened to that guy that was selling pieces of his condo he had bought in pre-construction?
  His website has not been updated in a while

• 30 Julian /Feb 29, 2008 at 10:08 am  Vote:    

  Further signs that Alt-A has cracked this morning. More write downs, more price reductions, more fire sales.

• 31 jcrimes /Feb 29, 2008 at 2:03 pm  Vote:    

  a breakdown in alt-a will be big (bad) news. although not the gold standard of packaged loans, in effect, it represents good credit score borrowers with minimal income documentation. if these folks are defaulting, then the credit and housing downfall is not contained to just subprime borrowers. i think it reinforces the notion that buying real estate right now, whether as an investment or primary residence, is just a bad idea right now (sorry to all the realtors). too much downside risk and prices are still nowhere near matching historical fundamentals.

  if anything, right now, i’d be hoarding cash and stuffing it in good corporate bonds whose yields are totally out of whack (there was a goldman sachs bond about a month ago that was yielding 9+%).

• 32 Alex G /Feb 29, 2008 at 2:45 pm  Vote:    

  Samir,

  There will definitely be many foreclosures due to the current gap between rental rates and carrying cost. Some may even result from other increasing financial pressures on unit owners (association fees, special assessments, taxes, etc). Not to mention the economy is not doing so hot right now.

  My point was that the bulk of the new condos haven’t even hit the market yet.

  When the supply of units for sale AND rent furhter increases, it will drive prices down even more. There simply isn’t enough end user demand to sustain the current price points. This downward pressure should last at least a few years since there is still so much in the development pipeline.

• 33 brian /Feb 29, 2008 at 4:27 pm  Vote:    

  You can just pay one of the hundreds of bums and homeless people outside the building to be the maid for cheap. Most of them look like Tyrone Biggums from Chappelle.

  That rental stream “might” break-even if you rent it out 12 months every single year with no downtown. But in reality, there will be a few months vacancy, commissions to pay, and thousands of more rental units coming online (look at 50 biscayne, midtown, 10 museum rentals), and money to market and repair that condo.

• 34 Buyer Tom /Feb 29, 2008 at 4:47 pm  Vote:    

  NY Times article on the increasing number of people walking away from their mortgages:

  http://www.nytimes.com/2008/02/29/us/29walks.html?_r=1&oref=slogin

  Pretty scary…and it will get worse. Basically, buy a home with no money down, cash out any additional equity, don’t pay your mortgage, get to live in their free for a few months, then walk away. If value goes up, cash out some more equity, if it goes down walk away. The buyer can’t lose. My goodness the banks were stupid, no we all are paying for it through higher home prices or through taxes. Banks won’t go after these people for the additional money and now the IRS won’t either in short sales so more incentive to walk away. What was the govt thinking??? At least people feared the IRS if they didn’t fear the bank!

• 35 lara /Feb 29, 2008 at 4:59 pm  Vote:    

  does someone have any info on attorney Cooper. He seems to represent some buyers in Quantum

• 36 jcrimes /Feb 29, 2008 at 5:37 pm  Vote:    

  i’ve seen cooper in action on a specific matter. he got beatdown.

• 37 Julian /Feb 29, 2008 at 7:32 pm  Vote:    

  Buyer Tom - I am stunned by the statement in the article that says (for example) in California you are not responsible for your debt.

  What on earth has been going on in the US?

  In the UK, if the bank forecloses and you owe more than is raised, you continue to be liable for that amount forever. You have to negotiate with the bank on the remainder or be declared bankrupt.

  There is also no special homestead protection?

  What are legislator thinking? An absolute right to own a home, no matter what your worth, and when it goes wrong the banks (i.e. rest of society and its depositors/taxpayers) pick up the tab and you can’t be pursued for the debt?

  Therefore, there is every incentive to take risk, none to save or be cautious.

  As a big fan of the US, but if your leaders don’t change that law and more importantly, the premis on which home ownership is made, 1929 will be nothing.

• 38 jcrimes /Feb 29, 2008 at 7:42 pm  Vote:    

  julian
  you’re still liable for any deficiency. thing is, it’s just a bitch to collect on and more importantly, expensive and time consuming. factor in that a person could file for bankruptcy to discharge the deficiency, and it’s usually not worth pursuing it. heck, if i’m a lender, and i can’t effectuate a workout of the loan, i’m doing a deed in lieu just to save on foreclosure costs and expenses and would be willing to forgive any deficiency as part of the deal.

• 39 lara /Feb 29, 2008 at 8:09 pm  Vote:    

  jcrimes,

  does it mean that cooper is not so good? what is his reputation. Please advise

• 40 JL /Feb 29, 2008 at 8:59 pm  Vote:    

  From the NYTimes article:

  “he learned about a new company in San Diego called You Walk Away that does just what its name says. For $995, it helps people walk away from their homes, ceding them to the banks in foreclosure”

  Not my deal, but anybody who starts a business like that in MIA will make a killing… an absolute killing. Just hire a couple kids that hand out club flyers and some delivery drivers to slide some business cards in condo units. No need for thanks. Just let me have a couple rides on your 90 ft. Predator when you cash out.

  The NYTimes article made me think about a point that is never really mentioned much in terms of explaining the past price bubble action and predicting the probable future price action of condos.

  “When homeowners see houses identical to their own selling for much less than they owe, Mr. Menegatti said, “I wouldn’t be surprised to see five or six million homeowners walk away.”

  That highlights the major problem with condos right now… Condos, unlike houses, tend to be IDENTICAL. Houses on the other hand, you have so many factors coming into play, it’s hard to compare one against another. 2 houses next to each other can be dramatically different. However, condo units are very easy to judge against each other, even if they are in different buildings. Once a legit sale goes off in any one condo unit, you can pretty much come up with an accurate “true value’ number for any unit in the building or nearby buildings. It’s trivial to make an accurate comparison of condos and it’s trivial now with technology to track prices.

  So you when get one or two real low sales in a condo building, guess what, even if that is a true blowout price, that blowout unheard of price now becomes the ceiling. In a declining market, if I know an identical unit sold –foreclosure or not- at $250 sq/foot, you think I will pay more than $250 sq/ft for the same unit? No way, I’d expect $230 sq/ft now in a declining market, foreclosure or not.

  This worked in reverse in the GoGo times when you had realtors saying, yeah, you’re looking at 2901 and 2501 just sold for 1 mill, so you’re going to have to pay more than 1 mill; and there was nothing wrong with that statement at the time.

  Now we’re taking the same pressures but in reverse, but somehow, I don’t hear realtors readily doling out the advice in reverse. I still hear things about %drop from the top of the market or a unit’s cost getting close to pre-construction costs or builder’s costs or price relative to 2003, blah blah. All that is irrelevant; what would be relevant is a simple cogent analysis of “well the lowest price that a unit recently sold for in Z building was XYZ, and based on that, you should offer less than XYZ for a similar unit now because we are in a housing slump.”

• 41 Buyer Tom /Feb 29, 2008 at 9:37 pm  Vote:    

  This may come as a surprise to many, but California and some other states are non-recourse mortgage debt states meaning the banks ONLY collateral is the real estate, nothing more. That may sound crazy, but what it SHOULD do is make banks less likely to make bad loans since they rely only on the real estate….underwriting should be stricter. But as we’ve seen that is not the case when underwriting went out the window. Sorry to correct you jcrimes, but some states are in fact non-recourse mortgage states (FL is not). Even in recourse states, many banks don’t bother to pursue the debt. And now with the new IRS law not making the mortgage debt shortfall income to the borrow there is NO reason to not walk away in non-recourse states!!! They should not have passed that law just recently. EVERYONE will walk away and just take the ding on their credit score in CA!!!!

  ” nonrecourse debt or non-recourse debt or nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. “

• 42 Buyer Tom /Feb 29, 2008 at 9:42 pm  Vote:    

  Think about my above post…think long and hard. Yes, the IRS law change was a major mistake and will only accelerate the price declines for the whole country. It sounded nice for the poor guy that losses his home, but that guy lived it large in a house beyond his means, may have used it as an ATM to indulge in an orgy of consumption, drove home prices up for the rest of us + inflation + now deflating dollar, got to live in his home without making payments for 6+ months, etc. etc. Darn right the IRS should be pursuing these guys for a long time …. heck those funds will be needed to bailout this mess!!! HUGE mistake to have just changed that law….HUGE.

• 43 jcrimes /Mar 1, 2008 at 9:02 am  Vote:    

  buyer tom
  you are right that CA, for purchase money mortgages on your own home, is non-recourse. but any home equity line, or investment property is fully recourse.

  as for the new irs rule, well, in the old days, i.e., before the rule, there was a way to get around the debt forgiveness being taxable income issue. don’t know the logistics (there’s probably a good article out there about it), but i know it could be done but was a pain in the ass (you had to get the bank to play ball). the new rule just streamlines the whole process.

  lara
  not gonna knock on cooper in a public forum. i saw him on one matter and he lost. my own advice however, is not to commence a lawsuit against the developer which appears to be what many lawyers, including cooper, are doing. talk with the developer and their counsel, feel out their position and make an offer if you’re trying to get out of the contract. they’ll take a hardline stance initially, but realize, they have a mortgage to pay and everyday that goes by without you closing is costing them money (along with attorney’s fees).

• 44 Seanjohn /Mar 1, 2008 at 12:41 pm  Vote:    

  Is $229k for a 1/1.5 at Blue such a bargain when
  you see a high floor 1/1 in the Waverly in South
  Beach listed for $305k? I think Blue’s location
  is too hybrid for many renters & potential owners despite its proximity/access to the beach. There is however, despite the proximity,
  a wider gap in credit access than the Julia Tuttle
  can span in my view between the two locations
  currently.

• 45 Julian /Mar 1, 2008 at 1:01 pm  Vote:    

  Jcrimes - in my experience that approach doesn’t work. The hatches have been firmly closed and whilst neither approach may work in the end, I think, at least outside of downtown, the developers are still smoking 2005 arrogance.

• 46 BFG /Mar 1, 2008 at 1:39 pm  Vote:    

  “I am stunned by the statement in the article that says (for example) in California you are not responsible for your debt”

  Like other posters mentioned, CA has “non-recourse” mortgages. Many other states (such as Florida) do not - you ARE liable for any deficiency. I guess the idea is that the bank is responsible for proper due diligence when deciding to make the loan and that the house is enough collateral if there is default. However, there is still a penalty for walking away in CA in that your credit rating will take a hit, and you won’t be able to buy another house for some time.

  But you’re right - that is a relatively small penalty compared to having a judgement against you that forces you to declare bankruptcy (which is the case in Florida).

  The new “mortgage forgiveness” act that they just signed into law, however, will make it much easier for people in any state to walk away from their mortgages. It is only for a limited time, and only applies to purchase-money mortgages (not cash-out refi’s or second mortgages), and only on homesteaded property (condo flippers are out of luck). But it certainly makes it MUCH easier to walk away now.

  The irony of that law is that it was designed to help out homeowners, but in the end will hurt even more people because there will be a huge wave of foreclosures from people that COULD afford to keep paying their mortgage, but don’t WANT to keep paying, and will gladly walk away from their debt if there is no serious penalty.

  This will cause a snowball effect - more foreclosures causes lower values, which causes more people to be “underwater”, which causes more people to walk away, causing more foreclosures, and the cycle repeats.

  That is just another reason why I think we’re closer to the beginning of this mess than we are to the end. 2008 will dwarf 2007’s foreclosure totals. And 2009 may be even worse yet. The banks and county clerks are so backed up with this stuff, that it’s taking them far longer to foreclose on stuff.

  A guy I know stopped payments on his mortgage in Feb 2007 - his house is finally going to foreclosure sale at the end of March. He did nothing to fight the foreclosure, either. That’s just how long it can take now before property ends up back on the market. There is a ton of stuff in the pipeline that will come up eventually.

• 47 gables /Mar 1, 2008 at 2:21 pm  Vote:    

  Does anyone have a status update on Met1? Looks like an interesting building and nice location, but have not been able to gather any price info, opening date, etc. Any news?

• 48 Generalmagic /Mar 1, 2008 at 5:47 pm  Vote:    

  seanjohn,

  That unit is a short sale. I am not sure if they have bank permission to sell at the price. We will see.

• 49 Buyer Tom /Mar 1, 2008 at 6:07 pm  Vote:    

  BFG - that’s the thinking I was talking about. We need pain in foreclosures. Debt has consequences, it needs consequences esp. if long term to keep committed to their position and making fewer consequences will make things worse. Many people will choose to have their credit dinged instead of being a slave to debt. Not good.

• 50 Seanjohn /Mar 2, 2008 at 11:48 am  Vote:    

  Generalmagic,
  Thanks but I’m not sure which unit you mean?

• 51 Lucas Lechuga /Mar 2, 2008 at 1:31 pm  Vote:    

  Seanjohn, I think he meant the Waverly one bedroom.

• 52 Sideliner /Mar 2, 2008 at 7:01 pm  Vote:    

  Hi Lucas,how long will it take to know what the sale’s statistic’s are for the month of FEBRUARY??Do you see any increase in sale’s at all for March?

• 53 Lucas Lechuga /Mar 2, 2008 at 7:33 pm  Vote:    

  Sideliner,

  I like to wait at least a few weeks before checking the sales stats for the previous month. Some agents are lazy and take a long time to change a listing from pending sale to closed sale. Yes, I think March will be a good month because many of the contracts that went pending in January and February will close in March. We’ll likely see an increase. I need to start tracking pending sales though in future months too since that is a leading indicator.

• 54 JasonN /Mar 2, 2008 at 10:18 pm  Vote:    

  I am not a big fan of Blue. The balconies are totally unusable with all the road noise you hear from the expressway right in front of you.

• 55 Alejandro Diaz-Bazan /Mar 2, 2008 at 10:34 pm  Vote:    

  That Unit at the Waverly 1 bedroom listed at 305 is a shot sale and I have showed it and I dont believe it is aproved.

  I showed a short sale last month that was listed at 590K, we offered significantly over that and they wouldn’t accept it

  It really frustrates me when other realtors list short sales at a number that is not aproved becuase it makes us loose time and it is very difficult for me to take a client to an apartment for example this one listed at 305k and we put an offer for 305k and they counter with a higher number

• 56 Generalmagic /Mar 3, 2008 at 9:42 am  Vote:    

  Alejandro,

  Very interesting. I suspected that. Very misleading!

• 57 BFG /Mar 3, 2008 at 3:43 pm  Vote:    

  The vast majority of “short sales” have not been approved by the bank. That’s why they are a waste of time.

  Here is an interesting article about short sales:

  http://blog.franklyrealty.com/2008/02/va-short-sales.html

• 58 Seanjohn /Mar 4, 2008 at 1:07 pm  Vote:    

  Thanks guys for the feedback & info re shortsales & the 1/1 at the Waverly. It seems
  sketchy & unfair to me for anyone to list a
  unit like that if that is in fact the case. Very
  unfair to other seller in the same building
  obviously as well.

• 59 CA /Mar 4, 2008 at 1:54 pm  Vote:    

  Marina Blue has started closings a couple of weeks ago. Anybody knows what the default rate might be (high or low)? They have lowered the HOA about 20% because of recent drop in insurance rate…Good building to invest in, much better location than Blue?

• 60 dreaming /Mar 5, 2008 at 8:46 pm  Vote:    

  i almost rented a 2/2 in blue last year before i understood the miami scene. i am so glad i didnt. the location is a horror. surrounded by bums, and the noise from the highway. it is not close to sobe at all.

  the units are nice and the view high up are nice. however, it was overpriced then and it is overpriced still.

  btw, the waverly is a condo building with many big assessments needed. it is a shoddy building with many repairs needed. stay away. i live nearby and know what i am talking about.

• 61 RA /Mar 6, 2008 at 1:56 am  Vote:    

  CA,

  Correct, insurance has gone down as such so does the HOA. Most of the HOA’s for any building is the insurance component. Hopefully Florida legislature will continue to push down rates and do more to relieve property taxes.

  also agree MB is in a great location and it’s an excellent bldg. Took a walk the other day there very impressive. Close nxt week.

• 62 brian /Mar 6, 2008 at 9:28 am  Vote:    

  CA - there is no good building to “invest in” the CBD. Living their might be good, but it will be a long, long time before any appreciation of value occurs.

• 63 Huevos Fritos /Mar 18, 2008 at 12:12 pm  Vote:    

  401 BLU and MET-1 are they ever going to be finished construction?

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