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Icon Brickell Developer Agrees to "Friendly Foreclosure"

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Yesterday, The Related Group and its lenders agreed to a “friendly foreclosure” for Towers 1 and 2 of Icon Brickell. This video provides our commentary as well as the details pertaining to the agreement.



87 thoughts on “Icon Brickell Developer Agrees to "Friendly Foreclosure"

  1. I guess KW Realty lawyers are nervous about another Tibor Hollo-like lawsuit…that may be the most ridiculous, all-inclusive legal disclaimer I’ve ever read.

  2. Drew — I was just thinking the same thing. Gotta love the lawyers.

    ——

    Lucas — Nice job with these videos. I’m still not overly bullish about the Miami market, but I admire the effort you put into this site, the videos, etc. Really well done.

  3. Thank you Joe! I appreciate it.

    Keller Williams isn’t even aware of the videos yet. I decided to add the disclaimer myself. Figured it’s better to be safe than sorry later.

  4. Wow! The proverbial pink elephant of real estate goes down! Darwin rules!

    It’s about time. Not that I want to see this or any building go under. But these artificially, and unrealistically, bloated prices need to be adjusted; putting them more in parity with the supply and demand curves operating in Miami’s real estate market. Foreclosure, though a bitter pill, is the only way that this is going to happen because of the legal obligations involved.

    scriv

  5. I read in the miamiherald that related group will manage the properties still. So I don’t know if this is an iconic failure or not. related group will still make tons of money without having the large loans to repay.

    It will be interesting to see what HSBC does, I assume a few large bulk sales.

  6. They do not have to do bulk sales though it might happen. Just realistic prices like Infinity did and condos will be purchased.

  7. I agree with Elvis. Hardly an epic failure and prices most likely wont go down much.

    Icon has been selling gangbusters since the beginning of this year. They sold over 300 units in the first four months selling 126 units in April alone. Now the current prices may not have been enough to keep it in the hands of the Related Group but I don’t see anything indicating that HSBC is going to need to lower prices further. A bulk sale would definitely help speed up the process but other than that I would assume that with sales clearly picking up they would just sit back and see what happens.

  8. While the overall project over time may not be deemed a “failure,” it definitely was a failure from the developer standpoint. Millions of TRG’s and/or their limited partners’ $ was wiped out.

    They went from being the owner/developer to property manager. That’s like going from company president to company janitor.

  9. Good job on the video Lucas.

    I agree with Lara, Elvis and Gixxer 1000. The foreclosure process is more of a legal formality. For those Bears still sleeping in the woods, there is only one direction that the condo market is going and that is up. Maybe at a much slower and disciplined pace, but up. We are coming out of a very big recession and absorption of condos in the Miami market will take time.

    DML

  10. Price adjustments may occur, but not too much.As much as I would like to see 2bd going for 300k adn 3 bd for 500k, it is highly unlikely that is going to happen.
    Icon Brickell is a great project and in the future willl be a landmark in Miami.
    Bad timing and not a project for the average buyer, though.

  11. DML, I agree with you. Things do appear to be on the rebound here for the most part. What surprises me is the speed at which we got to this point. A year to six months ago the majority of posts on here were from “doom and gloomers;” a lot of them talking about prices dropping another 50% and a recovery taking 10 years or more.

    I wouldn’t say we’re out of the woods yet, but things are stabalizing, and some select buildings or general areas are seeing modest price increases. Recovery will be slow and prices aren’t gonna shoot up anytime soon, but I don’t think anyone is expecting that. Also kinda funny that the doom and gloom crowd seems to have packed up and left.

  12. DJ, I concur. 6-12 months ago, someguys were predicting that it will take years and years for the 22000 condos to get sold by the developers. but by spring 2010 most developers are running low on inventory. By the end of 2010, I predict there will be no developer owned units left. What an astonishing turnaround! In 2 short years since Lehman implosion and a severe recession, we are singing an altogether different tune.

  13. Oh, not all doom and gloomers have left. Joe and wild bill are still stuck in the past and darkness. would someone crack open their basement vent and let some light in please (and tell them it is bright and beautiful outside, do not be afraid, come out gently, you are safe).

  14. Lucas, I don’t like the videos. It’s harder to be discrete about my time-wasting-web-antics-at-work while listening to a video. Its much easier to look busy reading a screen vs listening to a video!

  15. Sloth:

    My guess is that this is why the foreclosure was so “friendly” …. just a guess. I am assuming that the Viceroy is merely a tenant/operator and has no material ownership stake. Under such a scenario, Viceroy came in, with its brand name and reservation system, to operate the hotel aspect of the development. Under such an assumption, Related retained the rights to the profits, operation and management of Tower 1.

    Put another way: Related and its lender “divided the pie” and Related got what it thinks is the part with, at least on a near-term basis, the least amount of mold on it; where as its lender walked away with towers 2 & 3, where the economic future is less predictable. Only time will tell who was correct. Again, it will be interesting to see how this pans out.

    Just a guess. Again, I could be “tilting at wind mills.”

    scriv

  16. The lender behind Tower 3 is Bank of America. A syndicate of lenders led by HSBC were behind Towers 1 and 2.

    SouthBeacher,

    If you watch the videos on the YouTube website you can use the “transcribe audio” feature so that you can read the speech instead of listening to it.

  17. Boy, you guys are a bunch of dreamers. Now I know how the Miami market got so overheated in the first place.

    If you think foreclosure is “just a formality” or that this bank is happy to be the proud new owner of over 1,000 unsold condo units, you’re out of your minds.

  18. Still way overpriced. To bad for all those 400-500 people that rushed to buy in now.

    Bottom line is if these were realistically priced in the 200k – $350k they would sell just fine and prob sell out very fast.

    No one talked about HOA dues on this and now it’s low cause the bank’s covering it all but can you imagine once this get’s turned over to the condo board how the HOA fees will sky rocket!!

    Also on another note I checked out Infinity and honestly wasn’t very impressed with the units themselves. Bldg seemed nice and all but the interior of units seemed liek the layouts were very small even the bigger units w/ more square footage wasn’t all that great. Funky shapes and angles that render living space almost useless.

  19. Joe:

    You are so correct!

    Foreclosure ain’t no mere “formaility.” Rather, it is financial Darwinism in action- – Nature’s way of killing the weak as well as redistributing, revaluing and restructuring their assets.

    I agree with you one-hundred-and-ten-thousand percent that the lender is not happy to be the owner of these units. Nor is the building’s HOA, I imagine. This property was horribly over priced, over hyped and, simultaneously, under-planned, thought out and designed. But it did make a nice set for a scene from Burn Notice….didn’t it?

    As I have said in the past, we live in interesting times. The developers learned from the mistakes they made during the housing boom that occurred in the 1980′s. This time around, it is the lenders that are getting stuck holding the bag; as the developers go into foreclosure and walk away from the architectural monstrosities they have created, leaving the lenders to dispose of the units on the open market – - and dispose of them at a loss, I note.

    It will be very interesting to see what happens at this development as, according to the articles found at the links below, the unit prices have declined from $600 per sq. foot to $400 per sq. foot.

    I highly recommend to all to treat this as an intellectual feast, not an economic train wreck: don’t just sit there and gawk; pull up a chair, grab yourself a slice of bread and commencing sopping up the gravy-laden brain food because THIS IS NEAT STUFF GUYS! This is financial, economic, and, potentially, regulatory history in the making!

    With this in mind, here are three articles from the Wall Street Journal on the deal.

    http://blogs.wsj.com/developments/2010/05/12/banks-bring-in-more-marketing-muscle-for-miami-condos/?KEYWORDS=icon+brickell

    http://online.wsj.com/article/SB10001424052748704247904575240560258282620.html?KEYWORDS=icon+brickell

    http://online.wsj.com/article/SB10001424052748703339304575239952028236116.html?KEYWORDS=icon+brickell

    Happy Friday to all!

    scriv

  20. Don’t worry, the “bears” aren’t dead! One has to ask oneself, if the condo market has already bottomed and on the upswing, why this huge foreclosure, “friendly” as it may have been? This was THE project and so ICONic of the housing bubble as it goes belly up. They were one that people thought could “hold out” and “go the distance” and that “no way” the project would go into foreclosure. Oh, if we could only believe the hype.

    Clearly, the condo market in our area is still bottoming. From there it will remain anemic. There will be no jump up in prices even when the huge inventory clears. I personally believe that a lot of these buyers…esp the cash only buyers…are buying for portfolio diversification more than anything given the continued economic (and monetary) uncertainties our there. I would be interested to see what percentage is primary residences and how many go on the rental circuit.

    With that said, there is no harm in getting more serious about condo buying but that doesn’t mean prices won’t go down some more. Most of the price declines have already occurred. Personally, I have been interested in a few short sales. Will see. Again, no rush…

    There is really no point in arguing back and forth if prices were too high, if there was a condo bubble, if prices will bounce back up so get in now, etc. If it ain’t clear to you by now what the situation is, then there is no hope for you.

  21. From first hand experience, I would say that 75% of the new buyers in brickell are from south america and they all buy CASH. They are diversfying out of south america and into the dollar. Some even have to buy dollars on the black market to close in the states (cough, chavez, cough).

    Crazy as it seems a busted condo market is a safer bet in the long run then holding argentianan, columbian or venezualan pesos. At least you know the dollar won’t evaporate.

  22. reader, you may be right. but for a second home which is an investment, taxes and hoa are a brutal cost to pay unless you can expect rentals to cover that cost plus interest on the cash. if i were south american, better move is just to park in short or medium term bonds. they must have alot of faith in real estate appreciation over the next decade. guess that is where many on this board disagree with each other.

  23. http://www.aolnews.com/money/article/with-tax-incentive-gone-home-sellers-looking-to-deal/19476702

    Nationwide, the actual price reductions average 10 percent, but in many major cities they are well above 10 percent, according to the numbers Trulia.com released this week.

    But in May, after the tax credit expired for most Americans, 12 of the largest 50 cities across the nation had 30 percent or more of their listings experience price reductions. By contrast, in April, only five cities had 30 percent or more listings with price reductions.

    Among the nation’s largest cities, the steepest price reductions came in Detroit, where they averaged 24 percent. Average price reductions were 15 percent in Las Vegas and Miami; 13 percent in Phoenix; 12 percent in Cleveland and Mesa, Ariz.; 11 percent in Baltimore, Jacksonville, Fla., and Fresno and Oakland, Calif.; and 10 percent in Los Angeles, Atlanta, Washington, Sacramento, Calif., and Tucson, Ariz.

  24. Gables -

    I am sure some of these players are doing that as well. I agree with you and that is partly the reason I have not bought a condo as I would just rather store my cash somewhere else at the moment.

    Second reason is that studies show that in order to come out ahead of a renter in the rent vs. buy scenario, a buyer needs to stay in their residence for at least 7 yrs. After that though its exponentially better for the buyer, the problem is getting to the 7 yr mark.

  25. gables – My take on the S. Am. buyers are that a condo purchase in Miami serves several purposes most of which make the economic/investment component irrelevant to the decision. Sorta like building a bomb shelter that doubles as a vacation pad and preservation of wealth. Owning a home outright in the States offers peace of mind…and a way to launder money (before more political upheavals)…so the taxes and HOA dues are minor in comparison.

  26. I agree completely with Renter Tom’s post #28. People need to remember that a lot of the people from Mexico and Central and South America who buy condos in Miami aren’t exactly spending hard-earned dollars to do so.

    As was true in the ’80s and ’90s, many if not most of them are simply looking to stash the money somewhere, preferably somewhere that gets the money out of their home countries (and currencies). Being able to stash the money somewhere “safe” is worth any potential losses on HOA fees, opportunity costs, etc.

  27. RT, also won’t disagree with you. but you may pay 4% on your capital to hold that property, plus loss of use for additional income. my point was if you are simply moving your money from an unstable to more stable environment-RE is not the best move. but i certainly understand the nonfinancial incentives as well.

    reader, the 7 year argument will be put up for discussion in the coming years. in the days of yore, people held a single job in one area long enough to reach 7 years of home ownership. i myself have held 4 different jobs in 4 different cities in the past 7 years. this is why so many folks, just like me, have been leery of buying into a market. if you know you wont take a loss, you can do it. but in an era of deflation, real estate can be risky for many upwardly mobile professionals.

  28. Just to continue my thought from my last post (~ #29), one of the problems with foreign buyers in Miami’s r.e. market is that they don’t have as much skin in the game as buyers from the U.S.

    During the boom, a lot of foreign buyers bid up the value of Miami r.e. by getting cheap mortgages from which they could (and often did) walk away scot-free (unlike Americans whose credit rating would tank under similar circumstances). Now, a lot of the foreign cash buyers seem to be spending their ill-gotten cash profligately, which also skews the market unfavorably for local buyers.

    If it’s true we’re at the bottom of the Miami r.e. bust but foreign buyers are the ones snapping up many or most of the condos, I don’t see how that’s good for Miami as a whole. All that will do is turn these allegedly upscale, luxury “residences” into glorified rental buildings.

  29. Renter Tom- Welcome back. Why the hiatus?

    Since your persona in my mind is that of a 65-yr old man, I thought maybe you had died.

  30. Reader hit the nail on the head! Foreign buyers from some of the Latin American countries have more important financial and risk management goals other than just trying to get a decent return on a real estate investment. The flight capital from some of these countries has and will continue to impact the Miami real estate market.

  31. Drew – Thanks for the diss…perhaps if you divide that in half you’d be a heck of a lot closer to my age. Just thought there was no point in posting with all the nonsense posts…cutting and pasting entire articles versus just a short quote and link made it sorta unreadable and tedious. Clearly there is no point in arguing about the real estate market here since it is intuitively obvious to the most casual observer what is going on. Prices are on a “rebound” now or next year. Perhaps I was just waiting for the miamicondoinvestments iPad app! Actually, Safari works great on the iPad so no app is needed.

    Joe – #31. Right you are. I have heard it from the lips of many non-Americans that they will just not pay there mortgage, HOA, or any of the loans they took to take cash out….they will simply live for free for a year or so, bank the saved cash (not in the bank they got the loans from!!!) then go back to country X. They don’t give a darn about a credit score. Banks were STUPID to give loans to these people and now it will just be that much harder for foreigners of good will to get a loan.

    Now back to my hiatus…. :-)

  32. Intersting points being made about south americans parking their money here. Makes perfect sense. I think this current recession taught us all that we’re not bullet-proof, but at least we have the luxury of having a relatively stable economy. Granted, real estate might not be the best investment for a wealthy south american, but I guess the added bonus of having your investment also be a vacation home in Miami is appealing.

    RT, welcome back dude. Let’s hear about the short sales you’ve been looking at.

  33. well RE prices in Miami/USA are closer to bottom..upper end sofla homes would need another 20% cut before price/rent mismatch disappears..and this in the face of 20% un+under employment is a cinch…

    But major harikari in RE is going to happen abroad…massive price plunges in canada, OZ, UK,China, India etc are coming…Brace for it…

  34. andi — I agree about the pricing of upper-end Miami r.e., but I haven’t seen much movement to that effect so far. I guess wealthier speculators/investors can hold out longer. There are high-end buildings on the Beach at which there have been no more than 2-3 sales all year, but prices are still holding at the crazy boom-era levels (or thereabouts). Some of these buildings are still easily 50-plus percent investor- and/or developer-owned. It will be interesting to see what happens over the next 6 months.

  35. “Right you are. I have heard it from the lips of many non-Americans that they will just not pay there mortgage” Renter Tom

    If true, that is a truly disappointing fact. But, like they say, money can’t buy many things….among which is class.

    My concern for South Florida real estate is, however, not so much the individual loser/purchaser who decides to flip their lender the bird and walk away from their mortgage and HOA obligations. Individuals are easier to deal with.

    My concern is the financial stability of these financially strapped “luxury” condos whose units have been bought in bulk by LLC’s because, should the owners of the bulk-buying LLC’s decide to flip their lender and HOA “the bird” and not pay their mortgage and HOA fees, these buildings face a coyote-ugly problem as collecting from an LLC is difficult, to say the least.

    As a professor of mine used to preach at us when I took asset protection: it is easy to get assets into a corporation. Getting assets out … that is the tricky part.

    Again, we live in interesting times here folks. Enjoy it.

    scriv

  36. I agree on the upper priced condos…most have held firm on pricing BUT they are not selling! So, we shall see the price declines in that area of the market continue for some time.

  37. Renter Tom — Have you actually been seeing downward price movement in the higher-end market (especially in Miami Beach)? There have been so few sales, especially in my main areas/neighborhoods of interest, that it’s hard to tell what the hell is going on. Just from the MLS, it looks like a big stalemate.

  38. Inventory and sales on a percentage basis are actually better in Miami Beach when looking at higher price points.

    Inventory at the end of April for Miami Beach:

    All units (2841 units) 149.16 average sales per month = 19 months
    0 – $200k (868 units) 59.16 average sales per month = 14.6 months
    $200 – $299k (456 units) 27.83 average sales per month = 16.38 months
    $300 – $399k (372 units) 19.16 average sales per month = 19 months
    $400 – $499k (252 units) 10.16 average sales per month = 24.8 months
    $500 – $750k (344 units) 12.83 average sales per month = 26.81 months
    $750k+ (549 units) 20 average sales per month = 27.45 months

    As compared to the rest of Miami-Dade without Miami Beach sales:

    All units (13073 units) 824.66 average sales per month = 15.85 months
    0 – $200k (6957 units) 601.67 average sales per month = 11.56 months
    $200 – $299k (41855 units) 91.5 average sales per month = 20.27 months
    $300 – $399k (1180 units) 39.84 average sales per month = 29.61 months
    $400 – $499k (716 units) 23.84 average sales per month = 30 months
    $500 – $750k (919 units) 33.5 average sales per month = 27.43 months
    $750k+ (1446 units) 16.72 average sales per month = 86.48 months

    In all the price segments at $200k and above Miami Beach has less inventory. And you can really tell the difference the higher you go. For instance when you look at condos priced $750k and above there was an average of 16.72 condos sold per month in ALL of Dade county excluding Miami Beach. However in the same time frame there was an average of 20 condos in this price range sold in Miami Beach alone. So in this price range while Miami Beach only makes up 27.5% of the market it made up 54.4% of the sales. Same thing with the $500k – $750k price range. Miami Beach makes up 27% of the market but 47% of the sales.

    The majority of the price declines in the upper segments will probably be in the units away from the beach.

  39. Joe – Had looked at Sunny Isles Beach area … on the beach … be sure to check out the list prices versus what they actually sold for.

  40. Gixxer 1000 — Not sure what your point is re: the above chart. Miami Beach is the highest-priced area of Miami’s r.e. market, so if you exclude Miami Beach, it skews the numbers. No big news flash there. You also didn’t break the inventory down into more revealing segments, e.g., $1,000,000 to $2,000,000, $2,000,000 to $3,000,000, etc. Miami Beach has well over 5 years’ worth of inventory in the truly high-end segments, which you hid by including those units in a catch-all $750,000-plus segment.

    The point I (and Renter Tom, et al.) have been making still stands: Unlike downtown, which has seen big price cuts and a lot of sales, the high-end market in Miami Beach is almost entirely stagnant. As a recent Miami Herald article (just posted in one of the other threads) pointed out, just *17* new condos were sold in Miami Beach in Q1 2010. That’s an atrocious sales rate / stagnant market by any measure.

  41. Another month-over-month home price index decline…the “double dip” is on…..or really the one large slide continues with a small government induced bump on the way down. Knife catchers…..

  42. Joe,

    “The point I (and Renter Tom, et al.) have been making still stands: Unlike downtown, which has seen big price cuts and a lot of sales, the high-end market in Miami Beach is almost entirely stagnant. As a recent Miami Herald article (just posted in one of the other threads) pointed out, just *17* new condos were sold in Miami Beach in Q1 2010. That’s an atrocious sales rate / stagnant market by any measure”

    First my point was pretty clear. Miami Beach is in a much better position than Downtown or the rest of Miami-Dade county for that matter.

    Second, you need to learn how to read properly:

    “On the sands of South Beach, sales of new condo units are sluggish, with only 17 closing in the first three months of 2010.”

    17 NEW condos were sold in SOUTH BEACH. This doesn’t count resale properties only new condos from developers. And it’s only for SOUTH BEACH not MIAMI BEACH.

    There were 267 condo sales according to the MLS in the first quarter 2010 in MIAMI BEACH. 52 of those sales were priced $750k and above. Those sales don’t include the 17 developer sales from South Beach that you were referring to.

    So my point is that while yes there is currently only an average of about 20 units priced $750k and above selling each month which seems low, there are only 549 of these units currently available in Miami Beach.

    “You also didn’t break the inventory down into more revealing segments, e.g., $1,000,000 to $2,000,000, $2,000,000 to $3,000,000, etc. Miami Beach has well over 5 years’ worth of inventory in the truly high-end segments, which you hid by including those units in a catch-all $750,000-plus segment.”

    Here they are broken down by price segments according to Lucas’ last suppy update.

    $750k – $1m: 137 units (6.33 units average) = 21.6 months supply
    $1m – $2.5m: 275 units (11.17 units average) = 24.61supply
    $2.5m – $5m: 94 units (2 units average) = 47 months supply
    $5m – $10m: 36 units (.5 units average) = 72 months supply
    $10m+: 7 units (no units) = can’t calculate

    So the first price segment to approach your “well over 5 years supply” remark would be the $5m – $10m category. “OMG there is 72 months of supply, thats OVER 6 YEARS!!!!” But at some point you have to use common sense to see there are only 36 of this units available. Your talking about only 36 units.

    Miami Beach just doesn’t have the supply issue that downtown does. Then add in the fact that while downtown is getting more popular, it still ain’t the beach. Miami Beach is more desirable which opens it up to more buyers.

    Since the high end segment doesn’t “truly” start until $1m there are only 412 of these units currently on the market. If the owners of these units were able to hold out this long while prices everywhere else were dropping why would they start dropping their prices now when prices are stabilizing????

  43. “Another month-over-month home price index decline…the “double dip” is on…..or really the one large slide continues with a small government induced bump on the way down. Knife catchers…..”

    What in the world are you talking about??? First off, new price index numbers don’t come out until next Tuesday. Second, the home price index is always two months behind so even when those numbers do come out Tuesday the numbers will be for the month of March.

    http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-

    They took down the numbers for January and February 2010 so right now they only have the numbers up until December 2009. However I wrote them down in a previous thread:

    February 09 154.23
    March 09—-148.75
    April 09 —–145.78
    May 09 ——144.59
    June 09 ——145.38
    July 09 ——-147.27
    August 09 —-148.91
    September 09 149.69
    October 09 —-149.09
    November 09 -149.08
    December 09 –148.66
    January 10 —–148.32
    February 10 —147.52

    I wouldn’t be surprised if the January and February 2010 numbers were revised up, but even if there not were still up from the low of 145.78 in April 09 and we don’t have any numbers close to today to know if were currently going up or down.

  44. Gixxer 1000 — First, I love how you cherry-pick the data you use in your little rebuttals. The discussion we’ve been having here has been re: new condos, so I don’t really care about the resale numbers.

    Second, how do you figure high-end prices have “stabilized” when there aren’t any sales happening in those segments? Again, there were *17* sales of new condos in all of South Beach* for Q1 2010. Entire buildings have gone 60 to 90 days (or more!) without a single sale. Does that sound like a “rebounding” or “stabilized” market to you?

    (* You do understand the difference between “South Beach” and “SoFi,” don’t you? South Beach encompasses something like 150 square blocks of Miami Beach, in which hundreds of new condos are available, including many buildings at which 50 to 75 units are available.)

    Third, I’m sorry I said “5 years” instead of the correct 3-4 years when I spitballed a calculation of Miami Beach’s high-end inventory, but my overall point remains valid: Miami Beach has a SEVERE backlog of high-end inventory. You can argue this until you’re blue in the face, but no amount of little charts and tables will change this fact.

  45. gixxer, the first american core logic report is out and shows a double dip occuring. year over year has increased, but month to month is dropping again-hence the double dip with a local peak occuring in late summer of last year. will it drop below last springs bottom? hard to say but its getting close. will have an answer by year end i suppose.

  46. Guys:

    I get it. Everyone is desperately hoping to find the “bottom” in the market.

    But spin the numbers all you like, we AIN’T there yet. We are months, maybe years, away from any semblance of a bottom. You can tar and feather a pig and call it “chicken” – - but it is still a pig.

    While I wouldn’t deprive anyone of the enjoyment of this apparent “rally” that Gixxer’s numbers seem to portray – - this rally, if it actually exists, is just another bubble. At best, this rally is synthetic in that an alarming percentage of real estate is being transferred from one group of investors to another, neither of which are genuinely interested in the property as a residence. Shell games are fun. But in the end, they are just shell games,

    Even the “high-end” condos (whatever that means) face the same problem: their value is dependent on economic forces beyond mere inventory, supply and demand or location. The majority of South Florida condos were purchased by IDIOTS in predominantly fully leveraged transactions: commonly referred to in the trade as “NINJA loans” (“no income, no job, no asset”). The debt obligations (mortgages) were securitized and sold over-the-counter (collateralized debt obligations (CDO)) to investors who hedged their CDO investments with other positions, synthetic and otherwise – - and I am not even getting to the naked shorts out there on these obligations. Now we have institutional investors with large portfolios of mortgage-backed and mortgage-related securities which have a high cost basis but no fmv because the mortgage underlying them was given to an IDIOT who either defaults in bad faith or, because they lack the financial resources, out of necessity.

    Unless you are completely oblivious to what is going on now – - hello, Greece, Spain, Italy…can you hear me now? – - sorting this mess out will take years, not months. And the instability in the financial markets “will” have a huge effect on values. After all, Germany passed rules baring naked shorts of its bonds and those of certain German companies. Why? To protect the purchasing power of the euro from being skewered by short-sellers – - and believe me, Blue Horseshoe likes the short position on the euro as well as the treasury notes issued by Greece, Spain and the EU.

    Bottom line: keep your goggles on boys, the free-fall ain’t over yet.

    scriv

  47. bottoms in housing do not occur at record low interest rates. they occur at much higher interest rates. what happens when interests rates begin to rise (and they will eventually)? if not, we will have hyperinflation and chaos once again.

  48. “First, I love how you cherry-pick the data you use in your little rebuttals. The discussion we’ve been having here has been re: new condos, so I don’t really care about the resale numbers.”

    If you are only concerned with the sales of new condos then why do you keep quoting supply numbers that are ONLY resale numbers and not supply of new condos???

    I like how you glossed over your clear exaggeration:

    “As a recent Miami Herald article (just posted in one of the other threads) pointed out, just *17* new condos were sold in Miami Beach in Q1 2010.”

    You clearly said there were only 17 new condos sold in Miami Beach and I clearly pointed out that those sales were only in South Beach. Also do you realize that those 17 sales were at an average price of $1,364 per sqft?

    http://www.miamiherald.com/2010/04/28/1601393/south-beach-condo-sales-drop.html

    ” South Beach condo units were a hard sell in the first quarter for 2010 — developers sold 17 units at an average price of $1,364 per square foot, according to a new Condo Vultures White Paper. Numbers are down 31 units compared to the same time last year, and down 136 units from the first quarter of 2008.

    Prices increased from last year’s first quarter average cost of a South Beach condo was $803 a square foot.”

    So while you keep yelling about how DEVELOPERS only sold 17 units in South Beach you seem to be missing the fact that while sales are down, prices are up.

    “Does that sound like a “rebounding” or “stabilized” market to you?”

    When the average price goes from $803 sqft to $1350 a sqft, yes that sounds like prices are “rebounding” or “stable”. You even admit this in an earlier post:

    “There are high-end buildings on the Beach at which there have been no more than 2-3 sales all year, but prices are still holding at the crazy boom-era levels (or thereabouts).”

    If prices are holding then why would they not be stable???

    Same thing repeated by your friend Renter Tom:

    “I agree on the upper priced condos…most have held firm on pricing BUT they are not selling!”

    If prices aren’t falling then why are they not stable?

    “(* You do understand the difference between “South Beach” and “SoFi,” don’t you? South Beach encompasses something like 150 square blocks of Miami Beach, in which hundreds of new condos are available, including many buildings at which 50 to 75 units are available.)”

    Yes I know the difference between Miami Beach, South Beach and SoFi. But it seems you don’t. South Beach is the southern most 23 blocks in Miami Beach and SoFi is the southern most 5 blocks of South Beach.

    “According to a new report by Condo Vultures, nearly 1,450 of the 5,600 new condominium units developed in Miami Beach’s trendy South Beach neighborhood were still unsold as of January 2010.”

    The unsold units represent 26 percent of the new inventory built since 2003 in 37 condominium projects developed in a 24-block stretch of the barrier island neighborhood. South Beach is defined as South Pointe Drive north to 24th Street, the Atlantic Ocean west to Biscayne Bay, according to Condo Vultures.”

    Are there plenty of unsold new condos in South Beach, yes. But still a lot less than across the bay where there are about 6600 unsold new condos. That’s my point there are less of these condos on the beach in a more desirable location. Therefore less need to reduce prices:

    “The strong international demand for sun, surf, and sexiness has made South Beach one of the few South Florida submarkets where developers and lenders are not negotiating to any great extent on price.”

    So they haven’t been negotiating prices yet and prices have already started to go up. Why would they start negotiation prices down now???

    “A key factor why the prices have not fallen more dramatically in the area is the new product represents about 27 percent of the overall South Beach condo inventory.”

    “The more attention South Beach receives in the movies, television, newspapers, and magazines, the more visitors that flock to the barrier island neighborhood that is 24 blocks long and 13 blocks wide.”

    “With millions of people coming and a limited land supply, residential pricing has spiked and continues to command some of the richest premiums in the region.”

    By the way I don’t know where you got that south beach was 150 square blocks. But regardless South Beach is only so large and is a market that is open to a lot more buyers. You can argue about the 17 sales until you’re blue in the face but prices aren’t going down.

    “but my overall point remains valid: Miami Beach has a SEVERE backlog of high-end inventory.”

    Again if we shift to Miami Beach you can argue this point all day as well but it doesn’t change the fact that zip code 33140 which is the main portion of Miami Beach posted a quarterly year over year increase of 4.6%.

    It’s obvious we are never going to agree but I think its funny that you go from saying that we are no where near the bottom to this:

    “If it’s true we’re at the bottom of the Miami r.e. bust but foreign buyers are the ones snapping up many or most of the condos, I don’t see how that’s good for Miami as a whole.”

    Even Renter Tom while making statements like this:

    “Clearly, the condo market in our area is still bottoming.”

    Slowly works in contradictory statements like this:

    “Clearly there is no point in arguing about the real estate market here since it is intuitively obvious to the most casual observer what is going on. Prices are on a “rebound” now or next year.”

    How can prices be going down NOW to the bottom while they are also going up NOW while rebounding at the same time????

    He’s clearly making his move like he did last time when he went from Buyer Tom to Renter Tom. I wouldn’t be surprised to see reemergence of Buyer Tom by the end of the year.

  49. gables – I have to agree with you…..the artificially low interest rates are distorting the market big time. Sure, it was necessary…to avert the “panic” and calm things down. As I had posted long ago…I wasn’t concerned about inflation in near or mid term but was concerned about the value of the dollar (not from inflationary pressures). If mortgages were at 6.5% where would this RE market be?

  50. “Clearly there is no point in arguing about the real estate market here since it is intuitively obvious to the most casual observer what is going on. Prices are on a “rebound” now or next year.”

    Oppppps, that was a typo GX…….should have read “Prices are NOT on a “rebound” now or next year.” My bad. Are you sure you quoted me correctly or did I mistype (again)?

  51. Renter Tom,

    Post #34. You typed prices were on the rebound.

    You also said this in post #24:

    “With that said, there is no harm in getting more serious about condo buying but that doesn’t mean prices won’t go down some more. Most of the price declines have already occurred.”

    You seem to be straddling the fence. To me it sounds like you’re saying most “most of the price declines have already occured” therefore some units may go down while some may go up so it doesn’t hurt to be on the look out to see what individual areas, units, etc might have already bottomed while it may take some more time for the rest of the overall market to catch up.

    This of course is very similar to what I’m saying. Markets like Brickell are posting 15% increases while markets like Hialeah are posting 40% decreases. So while the overall market is down, it doesn’t do you any good to look at the entire market if you only want to buy in Brickell. Furthermore as each month that passes the number of markets that are down are slowly decreasing. 4th quarter 2009 only 2 zip codes posted year over year increases and 1st quarter 2010 closer to 20 zip codes posted increases. By the end of 2nd quarter 2010 we should be to the point where the overall market is actually up.

    But to be clear as per your your post #56 you think prices are currently going down and will not rebound this year or next year either???

  52. GX – It really depends on the exact market (area, price point, and type (condo, SFH)). Hence the impression of fence straddling. Let me restate, price will NOT be rebounding now or next year….that was a typo and if read in context should have been clear as I have always posted that there will not be a rebound in prices but rather things will be anemic. With that said, most of the price declines are baked in already but another 10% is very possible and 20% is not out of the realm of possibilities. A further 50% price cut is highly not probable. Florida mortgages that are 90+ days delinquent are around 21% (one out of five!!!) and 30+ days at around 26%. Those are crazy numbers and does NOT indicate a rebound but rather continued declines.

  53. gables,

    Just like the case shiller home price index the corelogic Home price index is a couple of months behind. So the current index has numbers up until March. From the latest report:

    “National home prices, including distressed sales, increased by 1.7 percent in March 2010 compared to March 2009, according to CoreLogic and its Home Price Index (HPI). This was an improvement over February ‘s year-over-year price increase of 0.8
    percent.* Excluding distressed sales, year-over-year prices increased in March by 1.9 percent; an improvement over the February non-distressed HPI which f ell by 0.2 percent y ear-over-year.

    On a month-over-month basis, the national average home price index f ell by 0.3 percent in March 2010 compared to February 2010, which was more moderate than the previous one-month decline of 1.7 percent from January to February .”

    So yes, year over year prices are up and month to month prices are down. But again this is from February to March. And the monthly decline was only 0.3%. That’s 3 tenths of one percent. That’s basically flat. And its down from the 1.7% decline from the previous month. It doesn’t take a rocket scientist to look at the sales increases that we already know happened in April and see that were probably not going to keep going down.

    First you were trying to argue to me that month to month numbers don’t count and that year over year numbers showed what was really going on. Now you saying to ignore the year over year increases and look at the month to month declines???? Which is besides the fact that this is a national index.

    “hence the double dip with a local peak occuring in late summer of last year. will it drop below last springs bottom? hard to say but its getting close. will have an answer by year end i suppose”

    The peak was actually in September which would be the fall but whatever. You’re right that well know in the coming months. But given that we already know that locally prices went up from February to March and most likely have gone up from March to April then it seem clear where we are headed.

    These indexes are based off of things like sales (which are up), prices (which are up), days on market (which is flat), inventory )which is down) etc. You can act oblivious to the current data and say “OMG are prices going to go down or up????” But try not to look to surprised in a couple of months when the obvious happens. I’d agree that we could see some pullback due to the end of the tax credit but that wouldn’t be noticed until this summer.

    Another note from the report:

    “March’s year-over-year increase in the HPI shows that the housing market is continuing to exhibit signs of stability ,” said Mark Fleming, chief economist for CoreLogic. “The differences between trends, including and excluding distressed sales, indicate the strong influence of distressed activity remains, but the surge in home sales in March is giving the market a boost this spring. As the influence of the tail end of the tax credit and spring buying season fade, price growth will fade with it as we go into summer.”

    This Spring > Last Spring

  54. Renter Tom,

    So you’re projecting prices to go 10% – 20% lower than current (as in May 2010) prices???

    The latest case shiller numbers we have are for February at 147.52. Let’s assume it stays roughly flat until May. You think the value of housing is going to drop another 10% – 20% and therefore putting the index between 118.01 and 132.76. I’ll take a bet like that any day of the week.

    Median sales price is increasing, price per square foot is increasing, home price index is down about .5%. And what’s your time frame for this decline. I’m still waiting on you moody’s prediction that had prices down 30% by September.

    Just to be clear here some info for Miami-Dade for this year from MLS.

    Median price of all homes:
    Jan $145k
    Feb $140k
    Mar $155k
    Apr $155k

    Price per square foot of all homes:
    Jan $160
    Feb $164
    Mar $182
    Apr $182

    Case Shiller home price index:
    Jan 148.32
    Feb 147.52

    I can break out the numbers into condos and sfh but doesn’t make a difference. Any metric you use prices aren’t going down 10% from today.

  55. Gixxer 1000 — Your inability to admit error and your double-talk is becoming downright amusing.

    I said: “There are high-end buildings on the Beach at which there have been no more than 2-3 sales all year, but prices are still holding at the crazy boom-era levels (or thereabouts).”

    Gixxer 1000 said: “If prices are holding then why would they not be stable???”

    – Um, if I price my $500,000 condo at $2,000,000 and then leave the price at $2,000,000 for a year despite the fact that it hasn’t sold, that’s hardly indicative of a “stable” or “rebounding” market. SALES dictate the market, Gixxer, not prices.

    Further, as your own rebuttal mentions, there was only a net decrease of 31 units in the Miami Beach market FOR ALL OF THE LAST 12 MONTHS. Does that sound like a great r.e. market to you?

  56. Good grief!! Listen to this idiocy from our self-declared Miami r.e. expert, Gixxer 1000:

    I said: “(* You do understand the difference between “South Beach” and “SoFi,” don’t you? South Beach encompasses something like 150 square blocks of Miami Beach, in which hundreds of new condos are available, including many buildings at which 50 to 75 units are available.)”

    Gixxer 1000 replied: “Yes I know the difference between Miami Beach, South Beach and SoFi. But it seems you don’t. South Beach is the southern most 23 blocks in Miami Beach and SoFi is the southern most 5 blocks of South Beach.”

    – Are you freaking kidding me? Do you really believe South Beach is a ONE-BLOCK-WIDE AREA of just 23 blocks? Are you serious?

  57. Joe,

    You’re an idiot that comprehend. I clearly said that South Beach is the southern most 23 blocks of Miami Beach, which it is. Everything South of 23 st is South Beach. The island is about 13 blocks wide, which would make it about 300 (23 x 13) square blocks. Again I have no ideal where you came up with 150 square blocks.

    Its an island so obviously were talking about the whole island. So the best ways to describe it is to say its the southern most 23 blocks or say its 300 square blocks. Neither of which is 150 square blocks which is what you said.

    Here is the description from wikipedia:

    “South Beach, also nicknamed SoBe, is a neighborhood in the city of Miami Beach, Florida, United States. It is the area south of Indian Creek and encompasses roughly the southernmost 23 blocks of the main barrier island that separates the Atlantic Ocean and Biscayne Bay. ”

    Here is the description again from a condo vultures report that I put in my reply earlier:

    “The more attention South Beach receives in the movies, television, newspapers, and magazines, the more visitors that flock to the barrier island neighborhood that is 24 blocks long and 13 blocks wide.”

    Both of these descriptions are clear, your 150 block description is not. Again you’re and idiot.

  58. gixxer, you seem to be off your meds. i have not argued that either month to month or year over year are superior. i use both to get an understanding of the state of a market. if both show the same trend, i have confidence in where the market is going. if both show conflicting trends, you need to look deeper. they give me info on the function and the first two derivatives-i can glean a lot of info out of that. go take a basic calculus class. for instance, consecutive month over month declines are not good-the results are compounded. and i have said previously, april through july numbers will be meaningless to examine trends over the next year. those months create a black hole because nobody can anticipate how the tax break will affect the couple months prior and post. that is why the answer will not arise clearly until fall and winter.

    i have already said i am looking for a place, and when i feel a good deal exists i will pull the trigger without much concern. most of the downside risk has truly occurred. if you are so confident about your predictions, put some skin in the game. buy your condo today because you may be priced out in 6 months.

  59. “– Um, if I price my $500,000 condo at $2,000,000 and then leave the price at $2,000,000 for a year despite the fact that it hasn’t sold, that’s hardly indicative of a “stable” or “rebounding” market. SALES dictate the market, Gixxer, not prices.”

    I agree that sales dictate the market. The problem with your argument is that there was 17 sales and they did sale HIGHER.

    So if I price my condo unit at $2,000,000 and leave it there for a year and it doesn’t sale and then another similar unit does sell for $2,000,000 then that is going to leave me to believe that even though there aren’t many buyers right now it is in fact worth $2,000,000.

    Again you have already admitted this yourself:

    “There are high-end buildings on the Beach at which there have been no more than 2-3 sales all year, but prices are still holding at the crazy boom-era levels (or thereabouts).”

    While I agree there are less sales, the sales that are occurring are still at high levels.

  60. Gixxer 1000 — If the facts are so clearly on your side, then why does it always take you 20 paragraphs to rebut a 2-paragraph statement from anyone else? I bet your word count here, individually, exceeds the combined word count of EVERYONE ELSE who posts here.

  61. Gixxer 1000 said: “While I agree there are less sales, the sales that are occurring are still at high levels.”

    – Way to shift the goalposts YET AGAIN. This discussion is about Miami Beach’s high-end inventory. I claimed there was a substantial backlog and you claimed otherwise. Then the Miami Herald reported that exactly *17* new condos sold in Miami Beach in Q1 2010, and somehow you’re claiming this disproves my point. Amazing. You really should be a lawyer and/or politician. You spin absolutely everything in your favor without the least bit of shame or hesitation.

  62. And even MORE (semi-incomprehensible) spin from Gixxer 1000:

    “You’re an idiot that comprehend. I clearly said that South Beach is the southern most 23 blocks of Miami Beach, which it is. Everything South of 23 st is South Beach. The island is about 13 blocks wide, which would make it about 300 (23 x 13) square blocks. Again I have no ideal where you came up with 150 square blocks.”

    First of all, your comments above CLEARLY implied that South Beach was smaller rather than larger. Secondly, Miami Beach doesn’t average 13 blocks wide. The best part of SoBe, SoFi, is maybe 5-6 blocks wide. (And the widest part of SoBe, up at 23rd, is mostly a golf course, so don’t get cute with your math.)

  63. gables,

    “and i have said previously, april through july numbers will be meaningless to examine trends over the next year. those months create a black hole because nobody can anticipate how the tax break will affect the couple months prior and post. that is why the answer will not arise clearly until fall and winter.”

    The tax credit has been in place a while now so why only throw out April through July numbers and not all of the months that the tax credit was available?

    Just because you have confidence where the prices are going doesn’t mean you right. I’ve taken plenty of calculus classes, and finance classes, and real estate investment classes as well. Which is why I’m going to UM with their largest scholarship available and an additional assistantship. But that doesn’t mean I’m right either, so I guess time will tell.

    “buy your condo today because you may be priced out in 6 months.”

    See that’s the thing, people here seem to only be able to think in extremes. Either prices are falling or prices are increasing to price people out. I don’t think either of these are happening. I’m just saying that prices bottomed around April 2009 and will slowly move back to a traditional 3% – 4% yearly appreciation. I have no fear of being priced out because currently my salary is increasing more than 3% – 4% a year and I’m currently saving about $1k a month toward my down payment. So while I probably could only afford about a $250k home now that will probably be closer to $500k in 3 – 5 years and I don’t expect housing to double in 3 – 5 years. So I’m looking at buying now and then having to wait 7 – 10 years to buy again or just waiting 3 – 5 years to buy something nicer. And since I’ll be in grad school for one of those years I’m in no real rush. If I had enough to buy a place that I would like to stay in for 10 years I would probably pull the trigger.

    So to be clear I am not predicting any kind of crazy price hikes, I’m just saying the current numbers show prices have bottomed and aren’t going lower.

  64. GX said: “Renter Tom,

    So you’re projecting prices to go 10% – 20% lower than current (as in May 2010) prices??”

    - Wow, that is a misquote…. I never said that. Prices in general in our area will decline 1%-25% more on a sliding scale of probability. I think it gets more uncertain past 5% declines. Like I have said, most of the declines have already occurred but has the market bottomed for certain, no. It is still bottoming…..

  65. gixxer, you throw out the numbers in the months surrounding the tax credit expiration because it skews your results. contracts are signed in a rush in april because of the expiration and this cannibalizes the sales figures for the following months. rather than purchase in may, i purchase in april and get the deal. but nobody replaces my planned on purchase in may. we saw this with the auto tax credit as well. you are sharp enough to know this. dont play dumb. as for the other months, it has an effect on future predictions but does not create short term distortions like the expiration date. you just need to be able to back out transactions which would not have occurred without a tax break.

    gixxer “So to be clear I am not predicting any kind of crazy price hikes, I’m just saying the current numbers show prices have bottomed and aren’t going lower.” the numbers do not say that. a second dip is occurring-the numbers say that. whether that exceeds the previous dip-we dont know yet.

  66. Joe,

    “– Way to shift the goalposts YET AGAIN. This discussion is about Miami Beach’s high-end inventory. I claimed there was a substantial backlog and you claimed otherwise. Then the Miami Herald reported that exactly *17* new condos sold in Miami Beach in Q1 2010″

    You’re one funny guy. First you talk about how nothing Condo Vultures says is true. But when the Miami Herald quotes Condo vultures it’s different.

    Anyways, again you keep lying saying that Miami Herald reported 17 new condos were sold in Miami Beach when they reported that those were the only sales in SOUTH BEACH, which is why we were talking about SOUTH BEACH.

    “On the sands of South Beach, sales of new condo units are sluggish, with only 17 closing in the first three months of 2010.”

    http://www.miamiherald.com/2010/05/17/v-print/1634368/downtown-condo-deals-cut-into.html#ixzz0oZk4yEpF

    Are you telling me that there were 0 sales of new condos in all the rest of Miami Beach???

  67. Renter Tom,

    Ok so to finally narrow down you’re prediction we have a 1% – 25% decrease from current (May 2010) prices.

    That kind of a funny prediction. If the prices only drop 1% you’ll say you were right but at the same time if prices only go down 1% then that would mean were essentially at the the bottom????? What difference does 1% make???

    So basically you are saying that when the case shiller numbers come out for the month of May 2010 they will then go 1% – 25% lower than that number. You also said that they won’t rebound this year or next year so you expect that number it to stay at or bellow that 1% – 25% lower number for all of this and next year?

  68. Gixxer 1000 said: “You’re one funny guy. First you talk about how nothing Condo Vultures says is true. But when the Miami Herald quotes Condo vultures it’s different.”

    – Stop arguing like a 5-year-old. I’ve repeatedly said that I’m not a big fan of Condo Vultures’ projections (or their overnight transition from huge bears to huge bulls), but if they report a solid fact — e.g., a sales number — I’m not going to dispute it just to dispute it. Give us a break.

  69. Gixxer 1000 said: “Ok so to finally narrow down you’re prediction we have a 1% – 25% decrease from current (May 2010) prices.”

    – Please, PLEASE do all of us a favor and go look up the proper usage of “you’re” vs. “your.” Otherwise, *you’re* going to continue to make an ass of yourself with *your* awful grammar. It’s bad enough that *you’re* a know-it-all, but *your* second-grade grammatical errors are making you look silly.

  70. Gixxer 1000 said: “That kind of a funny prediction. If the prices only drop 1% you’ll say you were right but at the same time if prices only go down 1% then that would mean were essentially at the the bottom????? What difference does 1% make???”

    – Um, actually, that hypothetical 1% could make a huge difference if we’re looking for the REAL bottom, couldn’t it? You’ve split hairs here over far less meaningful data.

  71. gables,

    Regarding the tax credit, I’m not trying to play dumb. We just got threw talking about how 83% of the downtown units were purchased with cash by investors both foreign and domestic. Well if that’s the case then the majority of the sales are to people who are not eligible for the tax credit. I can see someone rushing to buy a $125k house in Kendall to get an $8k tax credit. But I don’t see to many people rushing to buy a $200k condo downtown. You’re talking about a difference of $40 when someones monthly payment is going to be about $2000.

    So even if it does increase sales at the lower end that actually works to LOWER the median sales price because it provides an incentive to sell more lower priced homes.

    Plus I’m not exactly sure that the tax credit was really spurring that much demand. I ran across a lot of articles like this:

    http://www.bizjournals.com/albany/stories/2010/05/03/daily7.html

    I actually thought about looking at a unit myself because of the tax credit but when I ran the numbers it just didn’t make a significant difference to get me to pull the trigger now. I think more than anything it probably helped people who could not have otherwise afforded a home. And if that’s the case then you were simply bringing new people to the table not people who would have probably bought in May or June anyway. As usual we’ll just have to wait and see.

    “a second dip is occurring-the numbers say that. whether that exceeds the previous dip-we dont know yet.”

    I don’t think that’s what the numbers are saying. We bottomed in spring of 2009 went up to fall 2009 then receded a bit through the winter and are now going back up again in the spring of 2010.

    Here are the median price of condos sold in Miami-Dade county:

    http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P1&report=FTFTDCO&typedetail=05&ptype=RE2&type=1

    Feb 09 $140
    Mar 09 $145
    Apr 09 $130
    May 09 $133
    Jun 09 $132
    Jul 09 $132
    Aug 09 $135
    Sep 09 $135
    Oct 09 $130
    Nov 09 $140
    Dec 09 $140
    Jan 10 $129
    Feb 10 $120
    Mar 10 $135
    Apr 10 $131

    Now I know that the median price doesn’t exactly equal the value of housing but price per square foot also follows this same pattern:

    http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P1&report=FTFTDCO&typedetail=03&ptype=RE2&type=1

    Feb 09 $188
    Mar 09 $193
    Apr 09 $176
    May 09 $197
    Jun 09 $199
    Jul 09 $189
    Aug 09 $190
    Sep 09 $201
    Oct 09 $192
    Nov 09 $186
    Dec 09 $204
    Jan 10 $189
    Feb 10 $183
    Mar 10 $206
    Apr 10 $225

    Again to me the pattern seems clear. April 2010 seems to be the first month to post a year over year increasing, meaning April 2009 was the bottom and when you look at price per square foot again April 2009 was the lowest. In both cases month to month numbers went lower at the beginning of 2010 and then started pulling back higher in March 2010.

  72. gix, the word on the street from economists is the tax credit failed because it did not bring new people to the table. people who used it were going to buy anyway-so it becomes a failure in its purpose. you and i both considered, but did not pull the trigger. it did not help those who could not buy otherwise-they could not get a mortgage. all this makes it hard to digest the trends which occur around its expiration time.

    in your first series of data, first four months in 2010 are worse than the first four months in 2009, both year over year and magnitude. your pattern is not clear at all. add to that uncertainty in 2010 sales due to tax credit and its a very murky situation.

  73. gables said: “in your first series of data, first four months in 2010 are worse than the first four months in 2009, both year over year and magnitude. your pattern is not clear at all. add to that uncertainty in 2010 sales due to tax credit and its a very murky situation.”

    No, no, no … don’t you get it? Gixxer 1000 claims that because prices ticked up by a whopping $1 year over year from April 2009 to April 2010, that “proves” that April 2009 was the bottom, *despite* the downward trend seen again in Q1 2010.

  74. “No, no, no … don’t you get it? Gixxer 1000 claims that because prices ticked up by a whopping $1 year over year from April 2009 to April 2010, that “proves” that April 2009 was the bottom, *despite* the downward trend seen again in Q1 2010.”

    I have posted information for 3 different metrics. When you look at average price per square foot it bottomed in April 2009 at $176 and is now at $225. Also the case shiller home price index bottomed at 144.59 and is now at 147.52. And yes the median sales price was at $130k and is now at $131k. The median sales price does not equal the value of housing exactly. But when you look at ALL 3 metrics you see that they ALL bottomed in around April of 2009. Believe what you want to believe but facts are facts. At least gables tries to put up a reasonable argument that it’s possible that we’ll go back down. I think it’s clear that were not because the current numbers are going up, gables thinks this is because of the tax credit, while I think the tax credit activity was minimal and mainly restricted to lower end housing. But regardless of whether we go back down or not, its a simple fact that were up from lows.

    That “downward trend” already turned back to an upward trend in March. You guys make it seem like the market has to only go up on the way up or down on the way down.

  75. Gixxer 1000 — I think the problem you keep running into is the fact that most people — maybe not hardcore r.e. types, but most buyers — consider a market’s “bottom” to be the point in time at which a piece of r.e. could be purchased at the lowest possible price. Using that as the definition, your insistence that April 2009 was the bottom — despite lower even lower prices in subsequent months — is a much tougher sell.

  76. Gixxer, you’ll have more credibility once you go out and buy a place for yourself. Others here, while cautious about values in the near term, have a bit more skin in the game.

  77. Joe,

    I moved the discussion to the first page.

    BillP,

    What in the world does owning a unit have to do with what I’m saying??? I’m just repeating sales data, why would I need to purchase a unit for the sales data to be valid????

  78. Gixxer 1000
    Post#84
    However, some of us do not want sales data to dominate this site. This site has been for some of us enterformation (my word) – enjoy coming here to get a feel and texture of S. florida condo living to decide whether or not join them there for fun and games or to know when to jump in, etc. You wouldn’t know it unless you let the people who live there speak their mind. While I tend to skip all you comments because they are too long and all about numbers and uninteresting in my opinion, you should not act like a bully knoking off everbody’s comment unless that’s your true intention. Let the people breathe here. Do not choke them.

  79. What Do You Think,

    I’m responding to people who are specifically saying I’m wrong. As you mentioned if you don’t like my post simply overlook it.

    I personally come here to debate facts and could care less about the meaningless entertainment. I don’t complain when countless people post ridiculous information like what porno directors are shooting pornos at what building or how some random chic (not from Miami) gets murdered after being scene at club space. I simply ignore those posts. I’m sure Lucas may like the added traffic to the site because of the entertainment but I doubt the people here for entertainment turn into actual customers.

    But the website is called Miami Condo Investments. Entertainment doesn’t help you with investments. But from what I can see there are some people who come here to dream about getting a Miami condo and want to hope that they’ll continue dropping in price so they can one day be able to afford more. So when someone comes in and posts actual sales data that shows prices are stabilizing instead of just ignoring these post people get offended because in a way it’s arguing against that persons hopes. But as an investment website I see very few people posting investment information.

    The main person who I seem to argue with the most is Joe who doesn’t live here while I’m currently in the process of moving here now. I’m sure I have been to Miami more times in the last few months than him. I don’t see how arguing with Joe who is arguing that prices are plummeting deters someone who doesn’t live here. The majority of time I post actual data and then he comes to tell me how its completely wrong because of what he feels. I agree that maybe we should just ignore each other but hey I’ve got nothing to do at work until I move.

    By the way if anyone has any recommendations I’m currently looking to rent a 2/2 unit Brickell.

  80. Gixxer 1000 said: “The main person who I seem to argue with the most is Joe who doesn’t live here while I’m currently in the process of moving here now. I’m sure I have been to Miami more times in the last few months than him. I don’t see how arguing with Joe who is arguing that prices are plummeting deters someone who doesn’t live here. …”

    – See, this is why we argue: Because while you claim to love “facts,” you use a lot of FICTION in your comments.

    For one thing, I lived in Miami FOR YEARS before leaving for a 1-2-year business deal. While I’m not in Miami at this particular moment, Miami is still home for me, and I’m quite sure my YEARS of living there still trumps the little actual knowledge you gained on your ADMITTEDLY brief visits.

    For another, please point out where I’ve been “arguing that prices are plummeting.” You can’t, because I haven’t been. All I’ve said is that I’m not convinced the high-end market has hit its bottom, and that even if the Miami market has bottomed, bullish price INCREASES are highly unlikely over the next few years.

    Bottom line, if you want to argue less, don’t create so much fiction that demands a reply.

    (Note: I’m cross-posting this in the newest thread (“Azure Amenities Video”) since Gixxer 1000 said he shifted the discussion to that thread.)

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