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Solaris at Brickell Bay – Deal or No Deal?

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Solaris at Brickell

There’s a one bedroom/one bath foreclosure at Solaris at Brickell Bay that is currently listed for $159,900.  The price of this 730 square foot condo was recently reduced 33 percent.  I showed the condo to a client this afternoon and found it to be in great condition.  The condo has real hard wood floors, stainless steel appliances and a bay view from the balcony.

Normally, I would say that this condo, with a list price that amounts to $219 per square foot, is a great deal.  However, there have been recent sales at Solaris at Brickell Bay that have me scratching my head.  These closed sales do not appear in the MLS.  Be prepared to be shocked!

  • Unit 706 – 1 bedroom/1 bath – sold for $28,000 in May 2008 ($37 per square foot)
  • Unit 803 – 2 bedroom/2 bath – sold for $10,000 in May 2008 ($9 per square foot)
  • Unit 1103 – 2 bedroom/2 bath – sold for $22,000 in April 2008 ($21 per square foot)

Each unit was sold to separate individuals.  Does anyone know the story behind these?  Were these once owned by the same bank who needed to liquidate their properties quickly?  I would think that they’d at least be able to get $125,000 for the one bedroom and $200,000 for the two bedrooms under normal circumstances.

Solaris at Brickell Bay was victimized by mortgage fraud which is now resulting in a high number of foreclosures.  There are risks associated with buying into a building that has a lot of foreclosures because of the likely unpaid monthly maintenance fees from these units.  There’s risk that a future special assessment could be billed to all condo owners if the association’s financial condition deteriorates as a result.  There’s also a risk that the condo building is not properly maintained.  Read the post entitled “Will History Repeat Itself in Miami?” to learn more about how bad things can get for a building who can’t pay its bills.

Nonetheless, with all risks considered, selling a condo for $9-$37 per square foot in Brickell seems crazy to me.  I know someone out there has the story behind these recently sold condos.  Please share with the rest of us.



152 thoughts on “Solaris at Brickell Bay – Deal or No Deal?

  1. Solaris is going to be surrounded by skscrapers in a few years the day they built Villa Magna, but it is the middle of Brickell.

  2. No one can sell at 9-37 dollars a square foot. My bet is that there is a side deal going on where someone is bringing lot’s of cash under the table. Sounds like someone is trying to laundry money ie. drug dealer or another bad apple. Just an opinion, any one else care to explain? Certainly at auction it would bring more. I have been told that 1 out of 5 transactions in Panama City are drug related with drug dealers trying to clean drug money with condo deals. I have also heard the heat is on them, so maybe they have decended on Brickell again, looking for side deals with lot’s of cash. Just an opinion, anyone else have a thought?

  3. Hey Lucas,

    That was quite a good discovery of yours. I think your on to something. Keep up the good work exposing fraudsters. If it was not for your good detective work, no one would have noticed this.

  4. It was my “discovery”, not Lucas’. He just posted my info. I was interested in the unit at the Solaris and did my due diligence. The public records are out there, people…use them before you invest!

  5. Lucas does great work with this blog…everyone should help keep it going, and email him with any info. you find. Grassroots efforts to expose the fraud!

  6. Another Fraud With A Twist,

    Drug money in Miami? That just can’t be!

    Seriously though, you are somewhat correct. About 8 months ago, I spoke with a Miami police officer who did reveal to me that much of the mortgage fraud in Miami was a result of drug money being laundered. When the market was hot, drug dealers would buy a condo that could require some work, pour $50,000-$100,000 into it and get back around 90-100 percent of it once they sold. They could then report to the government that they obtained the money as a result of the sale of their condo. 90 cents on the dollar beats the street value of laundering money in the black market. I may be wrong, but I’ve heard that the going rate nowadays is 70-80 cents on the dollar to launder money. At least that’s what Tony Montana tells me the going rate is.

  7. Here’s the scoop on these sales:

    All 3 sales have been sold with quit quit claim deeds and thus are not arm’s length transactions. The units were purchased by straw buyers at fraudulent prices in 2006 and 2007. Whomever is involved in the fraud, transfer the unit to other individuals (other straw buyers). The mortgages on these units will most definitely go into default.

  8. Hi everyone,
    after reading several post and suggestions, (ACE – PEREZ – SBKI, among others) I came to the conclusion that I would better “walk away” rather than closing. Losing 75% of my deposit was painful, but I got back promptly the remaining 25% as stated in the contract, without having to take any further action with letters, lawyers, etc. At least, this developer was correct for that matter!

    I was happy to hear lawyers ready to take my case on a “contingency” and boldly stating that they would be able to recover most of my deposit, without ever mentioning on which basis they were so sure of winning. However I was VERY unhappy to agree with their unreasonable demand to collect their fees from whatever amount they would be able to recover.

    In my view that was too greedy since it was almost sure that the 25% would be recovered without any trouble. On the other hand I was offering them even more of what they were asking, but ONLY on any amount they would get on the remaining 75% of the deposit.

    I’ll keep reading and see if any of these lawyers will win and what would be the net (%) that will finally go back to the buyer …and WHEN!

  9. So what’s the verdict on Solaris other than we can anticipate problems most likely due to the unpaid HOA fees from the fraud units.

    I mean is the building or units atleast decent. are the ammenities realatively good?

  10. Once Again asked Pelide: “Which place did u walk from?”

    We know it was not from one of the “places” erected by the “Donald Trump of the Tropics”.

    With Related, the mantra is:

    1. No investor is ever in “default”!
    2. Clock will not start on 21-day “default” period!
    3. You will NEVER get your 25% back without suing!
    4. If you sue, we will label you are a “whiney-ass loser” and your lawyer as an”an ambulance chaser”!
    5. So, “close on your condo” or wait until some judge takes one look at your suit for the 25% and awards it to you!

    What a bunch of lousy p—-s!

  11. The answer to these mysterious sales is easy.

    They all did it the WaMu Way! and perhaps with the help of a certain attorney on West Avenue.

    In all three WaMu loaned way too much, and their mortgage will now attach to these Quit Claim “buyers”, who will likely not pay a dime to WaMu. read Solaris values to drop due to nonpayment of Maint fees, and future foreclosures.

    All 3 sellers acquired the properties at very high prices in 12/07 from different women, Wamu loaned $566K, $810K, and $420K, for units the County appraises at $227K, $319K, and $325K.

    The Quit Claim Deeds were all represented as being prepared by a very green attorney working out of 1200 West Avenue. Might this rookie attorney merely fallen prey to the charms or windfall profits of these enterprising women?

  12. lucas
    i’m not sure buying real estate is an effective manner to launder cash. rather, laundering works best when you have a high turnover cash business.

  13. perez asked: “The Quit Claim Deeds were all represented as being prepared by a very green attorney working out of 1200 West Avenue. Might this rookie attorney merely fallen prey to the charms or windfall profits of these enterprising women?”

    The Flamingo porn shoots are at 1504 Bay Road! 1200 West is the Mirador. LOL

  14. “The Quit Claim Deeds were all represented as being prepared by a very green attorney working out of 1200 West Avenue. Might this rookie attorney merely fallen prey to the charms or windfall profits of these enterprising women?

    So basically the mortgages are getting passed off to another set of straw buyers? Legally, what might be shady about this transaction that the lawyer could be getting duped on?

    Do the 2nd set of buyers think they are getting a clear title? It’s not clear what is going on here.

    The fraud was in the original mortgage and first set of straw buyers. What’s the 2nd fraud? The orignial set of straw buyers washing themselves of the mortgage?

  15. Laudering Money 101.

    1. Buy at a reasonable price

    2. sell at an outrageous price

    3. Claim the GAIN on the original purchase and pay taxes on it.

    4. It’s clean!!!

    Sincerely, Tony Soprano

  16. Samir,
    You said in a previous post
    “The city I believe will begin reconstruction of Biscayne Blvd between Marquis and 36th street soon. It was budgeted for years ago and should be next on the schedule.”
    Do you know what has been budgeted and what are the plans for the stretch between 13th street and 36th street?

  17. Not happy with all da talk about condo frauds and shysters. I gots investments to look after. Say hello to my little friend you cockaroaches. College boy thinks he is so smart.
    Tony

  18. Hopefully Architectonica will tone down the fruity colors… It looks like this complex might physically dwarf the Performing arts center so adding in the bold colors might be a little too much.

    But on further reflection…

    You have a ghetto area with the out of place Performing Arts Center patroned by illiterates wearing Zegna next to a massive fruity tooty shopping area with modern high rise condominiums looming in the background… for Miami, this kind of makes sense. All that’s missing from the picture is an HIV clinic engaging in Medicare fraud to round out the picture.

    BTW, what are those 2 high rises in the background? If I’m not mistaken, they would be right on Biscayne Blvd.

    http://www.miamiherald.com/business/breaking-news/story/620402.html

  19. Thanks AJ,
    It just kind of illustrates the monstrosity that I have been taking about… its worse than I thought. I do feel however that the word is getting out and opposition to this project is growing by leaps and bounds. I can tell you that they will face a huge battle getting this thing built. Again, I am not against wallmart and I do think that there should be a place for it downtown… just not in that one spot… As a community those that care about this city can come together and really do something about it. I can round the troops at quantum… are you back in Miami? I think it would behoove our buildings to have a liaison committee to further the interests of the neighborhood as a whole… what do you think.
    Again, I am not professing to dictate what should be built on that particular parcel of land, but I believe that the momentum is clear that most residents respect and want to better their downtown. I don’t think that this is just a neighborhood issue, but one that concerns all of Miami residents.
    That said, this is a democracy and all will have their chance to vote for or against the commissioners that are in charge of this parcel of land (commissioner Sarnoff) whether they state they can do something about it or not…

  20. “There’s also a risk that the condo building is not properly maintained. Read the post entitled “Will History Repeat Itself in Miami?” to learn more about how bad things can get for a building who can’t pay its bills.”

    When the bank takes back a unit in foreclosure, they become the legal owner – so then why are they not required to pay maintenance to the HOA/Condo Board just like any other unit owner?

    How are the banks getting around that?

  21. AJ,

    Overall- yuck. I don’t care for the design at all. It’s only redeeming quality is that there is not an ocean of parking around it like a typical Sprawlmart. Otherwise, yuck.

    And I must agree with all those who say that it is not the best location. I read some article questioning how they are going to get all the cargo trucks that bring the merchandise to the site and handle that traffic/loading/service issues. That’s a bigger problem than all the traffic caused by people coming to shop there.

    I agree that there should be a Sprawlmart in the downtown core somewhere (done in an urbanistically responsible way) just not there- somewhere more to the west.

    Biscayne Blvd is an “A” Street- the main thoroughfare through the area. It should have all the bells and whistles and fancy shops. Sprawlmart should be on a “C” or “D” street- not as prominent. Otherwise where will we put our Gucci and Prada stores that noone can afford to buy anymore or get credit to buy anymore either!:p

  22. Just a general condo-market relevant bit of news:

    WCI Communities filed for Ch 11 bankruptcy today. Stock at 66 cents right now (down about 97% from last year).

  23. How does the WCI bankrupcy effect One Bal Harbour? I heard Regent left it’s much talked about Boston project last month. I guess Regent has an out now if they chose to leave and start from scratch with better possibilies.
    Seems like Lucas had this one pegged right on his project months ago, that it was doomed for failure along with WCI. Never liked that shared road entrance being shared with a middle of the road development ie. Harbour House. I know your blog on One Bal Harbour was followed closely on your blog, how about doing a link so we know how far ahead of the pack you were.
    Thoughts………………………….

  24. La La,
    I keep wondering, why can’t the Walmart join the bdb’s project “Bayview Shops” two blocks west of the opera house. It is 7.35 acres of land, larger than the city sq. parcels, Lowes is already on board. That would be a better location for Walmart.
    DLJ,
    I am doing our committee’s meeting on Wed Sept 10th at the 1800 Club at 7 pm. If you like, I can extend an invitation for you as an observer. I am also planning to unveil my plans to start a Pace Park Residents Association on that Day. I am planning to invite one rep each from Venetia, Grand, Opera, Biscayne Plaza, Quantum, Cite. I don’t think Bay Parc Plaza may be appropriate as it is a total rental building. More details to come soon.

  25. Those prices seem to reflect the future values of these units. In Detroit these units would sell for half of those prices.

  26. So here a Brickell question…what seems to be up with Capital on Brickell? I used to see workers and a trailer on the construction site. Seems prob for the last month I have seen no activity on thsi site and the trailer missing. I passed by today and it was a ghost town not even 1 worker. Could this be the end of Capital on Brickell and we are now left with a big hole?

    Also considering that there’s prob gonna be alot of defaults in Everglades and the fact that the Cabi head died is this the beggining of the end for Cabi?

  27. Pelide , I have the samw question as Un-Related for you ..Which condo did u walk away from? I am curious. Marina Blue will not give you 25% back and I have not heard of any developer who has done it..They are forcing you to sue to get your 25% stated in the contract !!!!

  28. CA this is absolutly not true. Developers give you your 25% of deposit back if it is in the contract. You do not have to sue them It might take them some time. May be 1 month or 2 but they give you back.

  29. Interesting Bearish argument from Meredith Whitney.

    “Housing prices will fall more than 30 percent before the market recovers and banks will continue their reluctance to lend until the credit crisis clears up, Oppenheimer analyst Meredith Whitney said on CNBC….”

    http://www.cnbc.com/id/26007215

    http://www.cnbc.com/id/15840232/site/14081545/?video=812131553&play=1

    She makes a simple argument. Banks aren’t making loans and they won’t be making loans for quite a while and when they do, you’ll need 20% down and a real job.

    Now think about that. Look at all the condos that were bought in Miami in the past 5 years… how many do you think were bought with at least 20% down?

    Now imagine all the Condos that are getting ready to come onto the market… imagine if each and every one has to be bought with at least 20% down? Anybody else see a problem?

    The demand/desire for Florida RE will come back, but it’s going to take time (and maybe never) for people to save up that 20% whereas before, 10% or 0% sufficed. I knew a ton of people that purchased 500K+ condos over the past 5 years in Miami, and honestly, maybe 10% at most had 100K+ in cash laying around that they could have used as a 20% deposit if the banks required it (which they didn’t).

    Going forward, banks are going to require that 20% and people in Miami just don’t have it and never did have it.

  30. Judge Seitz just stuck it to a bunch of contract holders at Opera Tower. Simple ruling. Outside of your contract stating you get some money back if you don’t close, it looks like the courts are shutting down the ILSA and FFAS arguments. If you’re a plaintiff’s lawyer, I’d drop the ILSA count and stay in state court on the rest.

  31. lara,

    You are the one who is incorrect. Several developers, including Related, do NOT declare “you” in default even though you “defaulted” months in the past. By declaring you “in default” a 20-day “grace period starts. If the “default” is cured before the expiration of the grace period, then the escrow is broken and any deposits in excess of 15% are returned to investor. (If your deposit was 20%, half of it is in escrow, so you are entitled to one-half of the 10%, or 25 % of the original 20%.. I believe the developer keeps the accrued interest.)

    So, if you are not declared in default by the developer, the 20-day “clock” doesn’t start and you sit and sit and sit. If the developer doesn’t return your cdalls or answer your letters, people get effing sick of it and go to lawyers.

    Most developers do not put people through this crap, after all, the investor is losing $60,000 of the average $80,000 deposit AND any judge who sees this stall being the subject of a lawsuit is going to find for the investor.

    For instance, this article about 50 Biscayne is from today’s Business Journal:

    http://southflorida.bizjournals.com/southflorida/stories/2008/08/04/daily8.html?b=1217822400^1679323&surround=etf

    Building now sold out to Gourge’s “vulture fund” and the are existing suits based on Related’s not returning the 25% of deposits to investors.

  32. Lara – the property appraiser’s website (http://www.miamidade.gov/pa/property_search.asp) is always a good place to start. This will tell you when the property was last sold, the sale price, and the market/taxable values. You should also check the county recorder’s office (http://www.miami-dadeclerk.com/public-records/default.asp) to see the deeds and any liens on the property.

    Another good site, though not a “public record”, is zillow.com. This allows you to pull up properties by address, and you can click on the link called “recent sales” to pull up the recent sales in the bldg. That was how I stumbled on the gems in this post. Just make sure you double-check the information against the property appraiser’s website, because zillow is sometimes wrong.

    Enjoy!

  33. so the most recent bulk sale at 50 Biscayne sold on average around $250k per unit. interesting, would certainly like to know what the price per square foot for the sale was. can related buy out the rest of their buildings in the same manner, or will they let individual buyers in at that price level as well?

  34. CA it seems that LARA is correct. If it is stated in the contract, I do not see any reason to sue. I believe that lawyers are scaring people and make them believe that to be sure to get back even that 25% they must sue first. Perhaps lawyers would spot something wrong in the contract, but they have first to explain/convince why and how they think to win. Then I’ll decide. I’ll never agree blindly for “contingencies” based on whatever amount they recover knowing that I have very good chances of getting back my 25% without litigation. I think I took the right decision and IVY sent the check within few weeks. True, I lost 75% but I’m not involved anylonger in what could have become a protracted litigation with unknown results.

  35. I just heard about a bank owned 1 bedroom @ the flamingo with resort pool and bay view (south tower) available for $200,000

    Could i please get an opinion from all of you out there about this property and value?

    I am interested in a vacation place in southbeach that might be able togenerate some revenue to help contribute in its carying cost.

  36. question about “vue” in Brickell at 1250 south miami avenue. Why the prices are so low? Is there a major problem in the building?

  37. Pelide,

    ONE MORE TIME: It depends on the developer and his attitude concerning people who can’t close.

    MOST developers like the one you were lucky to be dealing with return the 25% without any obfuscation. I know of a couple who did so BEFORE the investor’s scheduled closing.

    I am not advocating hiring “contingency” lawyers to sue, however, you have to realize that people who are losing $50,000 or more (the 75%) have an absolute right to become EXTREMELY dissatisfied with some billion-dollar operation whose response to the question: “May I have my 25% returned as per the Contract?”, get the answer: “No one is in “default” so “close on the condo”!”

    You understand?

  38. Buying multiple units in buildings is a recipe for disaster. Almost as smart as putting all you money into IndyMac Bank. I would be pissed if I owned in a bulk bought condominium. You could have an instant financial collapse if the fund went belly up. What would happen if a building had a hundred delinquent maintenance fees?

  39. Wild Bill,

    GREAT POINT! That is a classic example of “the trees” that blind buyers from seeing “the forest” behind them!

  40. Ray,

    the Vue is a disaster. a close friend of mine (who was renting) just recently moved out and couldn’t get out quickly enough. 30% are not paying HOA, services are declining, building has squatters, etc. and the building is now surrounded with several new towers so the views are likely gone, too–

  41. Umer,

    that Flamingo unit may be a good deal on paper. I would be careful. 1) That building was sold at the top of the market. How many other units will drag the price down even furher. 2) You need to find out the finacials of the building. How many people are behind on their monthly dues. Very important. You might be able to ask the management company. 3) Only the south tower is a condo. Do you really want to live in a rental community where the majority could care less about the up keep of the land. Just my opinion.

  42. Generalmagic asked: “Do you really want to live in a rental community where the majority could care less about the up keep of the land? ”

    I lived there in the “blue” tower for two years. AIMCO spent a fortune in maintainence on those grounds. The well-know “fraternity house” atmosphere was pretty much contained to the old North and South buildings.

  43. DON’T WORRY………THE DEAL’S HAVEN’T EVEN STARTED TO COME FORWARD YET.ANYONE THAT BUY’S NOW……..WILL BE PAYING WAY TOO MUCH.WAIT WAIT WAIT.

  44. Pelide, Lara, Unrelated,

    I wrote aletter to Marina Blue asking for 25% back and they refused. I know of 4-5 MB buyers who are in a lawsuit, just trying to get their 25% back..Their lawyer wrote MB a letter demanding the 25% and still they refused to budge. Bunch of thugs !!!

  45. CA,

    Contact the escrow company that is holding the half (10%) of your deposit. Get the underwriter’s name, address & fax. The inform the escrow company you are in a dispute with the developer (the reaosn doesn’t matter) and PUT A HOLD on your escrow account. That way, they will NOT release any funds to the developer until you release the funds in writing!

    It won’t cost you a dime but if they want their half of the funds, they will have to honor their contract!

  46. Hi Everybody!
    I would like to know if it’s a good idea to buy right now at the Club in Brickell Bay (12oo Brickell Bay Dr). The prices are really low now and I might be able to get a good deal. I’m thinking about making an offer for $100k for a 1/1 condo. Will prices drop more than that? is this a good investment?
    Thanks!

  47. Heard that WCI is desperate to unload properties 70 percent off. Heard that there are 45 of 205 condos in foreclosure at Bella Mare in Aventura, and that many coming due at other buildings including Oceanside and One Bal Harbour. Will get worse as no loans will be given, and sales are cash only.
    thoughts?

  48. 70 percent,

    I don’t think WCI owns any more units at One Bal Harbour. At most, they own one unit but I think it went under contract a month or two ago. They do own a bunch of units at The Regent, however.

  49. Would be great if you could get the HOAs at 70% off…

    Have people gotten their tax assessments yet? I’m curious if Miami Dade is taxing on Bubble valuations. How on Earth are they going to figure out market value?.. This should be interesting.

  50. yes we have JL… those of us that pay in quarterly installments and yes they are higher than last year… I am in the process of contesting these already… it makes you wonder about our local government.

  51. Take a look at this from Mish’s financial blog (http://globaleconomicanalysis.blogspot.com/):

    The worst states as a percentage of budget gaps vs. general funds are in order: California (21.3%), Arizona (17.8%), Nevada (13.5%), Rhode Island (12.6%), Florida (11.0%), New York (9.1%), New Jersey (7.6-10.6%), and Alabama (9.2%).

    No wonder we are being taxed at outrageous valuations that only make sense in Wonderland.

  52. Generalmagic and unrelated thankyou for the info, certainly helpful. I also found out that it is actually a short sale and that the bank may sit on the offer for quite a while, does anyone have any idea how long that tends to be right now?

  53. Anyone read Peter Zalewski’s latest report on rental rates in Downtown Miami?

    Very interested to see what people here think…

    $2psf rents in this environment seems like a ridiculous amount to me. I bet you cannot get those rates going forward and you can ceryanly get sweeter deals than that if you try to negotiate a listing from MLS

    He also says that “less than 800 units” are available for rent, which of course doesn’t really give you a perspective of the market and its condition as there are still a lot of people TRYING to sell their units…

  54. Cyrus,

    Do you remember the unit number? Listings that are no longer available automatically are removed from the condo deals page. It is likely now a pending sale, has been canceled, withdrawn or has expired.

  55. This is the full report from the email I received today:

    August 6, 2008

    Condo Vultures® – Market Intelligence Report
    Renters Filling New Miami Condos, But Will Rates Hold?
    Less than 800 condo units are currently available for rent in the Greater Downtown Miami area despite nearly 21,000 new residences being built in the last five years, according to a new report from Condo Vultures® LLC.

    Of the units that are currently available for lease, the rental rates being agreed to on an annual square foot basis per month are about $1.85 for a city view and $2 for a water view in the Greater Downtown Miami area defined as the Rickenbacker Causeway north to the Julia Tuttle Causeway, Interstate 95 east to Biscayne Bay.

    The Brickell Avenue area, Downtown Miami, and the Biscayne Boulevard Corridor together comprise this 60-block stretch from south to north.

    “Despite all of the speculation surrounding the Downtown Miami condo market, rental activity is surprisingly strong – for the time being – with tenants snapping up units at a pace that has kept many investors out of foreclosure,” said William Betancourt, a rental specialist and licensed real estate agent with with Condo Vultures® Realty LLC. “We have found that there is a lot of demand from young professionals to occupy many of the new projects in Greater Downtown Miami. Most of our renters already work and socialize in the area so it is a natural progression for them.

    “It also doesn’t hurt that renters can live in never-before-occupied units at attractive prices. ”

    This year 1,102 condo units have been leased in the Greater Downtown Miami area, with leases ranging on a monthly basis from $950, or $1.92 per square foot, for a 496-square-foot studio in a new waterfront facing building in the Biscayne Boulevard Corridor to $9,000, or $3.04 per square foot, for a new waterfront condo with four bedrooms and 2,959 square feet on Brickell Key, according to the Multiple Listing Service.

    The median lease price transacted is $1,600, or $1.89 per square foot, for a one-bedroom unit with 846 square feet in a new waterfront condo in downtown Miami.

    Renters are leasing up one-bedroom units at a quicker pace than the two-bedroom units, which traditionally are the most popular, according to the report.

    There have been 538 one bedroom units that have rented in the Greater Downtown Miami area with the median monthly price being $1,450, or $1.85 per square foot, for a 783-square-foot unit in a new building on the Miami River.

    Compare that to 437 two-bedroom units that have rented with the median price being $2,000, or $1.65 per square foot, for 1,212 square feet in a new building on the Miami River.

    Studios have been slightly more popular than three-bedroom units. There have been 62 studios rented in 2008, with the median monthly price being $1,150, or $2.55 per square foot, for a 451 square foot unit on the Miami River, while 60 three-bedroom units have rented with the median monthly price being $2,650, or $1.87 per square foot, for a 1,419-square-foot unit also located in a new building on the Miami River.

    There were three four-bedroom units that rented this year with the median monthly price being $8,000, or $2.34 per square foot, for a bayfront building with 3,415 square feet. Only one five-bedroom unit, which was built in 1955 and has 4,250 square feet, has rented this year, at a rent of $3,500, or 82 cents per square foot.

    “The rental market is stronger than I have seen it for some time,” said Betancourt, who can be reached at William@CondoVultures.com. “The tightening of loan requirements, rising gas prices, and the ability to live in brand new units at investor-subsidized prices all attribute to the robust rental market in Greater Downtown Miami.”

    The looming question, though, is whether rental rates will continue to be this robust.

    Nearly 90 percent of the new Greater Downtown Miami condo product is already available or scheduled to be delivered this year, and rental rates are still close to $2 per square foot for an unfurnished unit, said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® that authored the report.

    The flip side is that bulk buyers trying to acquire hundreds of developer units in the Greater Downtown Miami area are projecting rental rates of $1.25 per square foot through 2010, Zalewski said.

    “The key to leasing success for landlords in the Greater Downtown Miami rental market will be to continue to maintain prices below the premium rates charged in South Beach,” Zalewski said. “If landlords can maintain the pricing advantage combined with the new product available in Greater Downtown Miami, many landlords think renters can be persuaded in growing numbers to leave Miami Beach for a 10-minute drive west over the causeway.”

    Prospective tenants who are looking today for units in the Greater Downtown Miami area will find that a majority – 53 percent – of the 791 condos currently available for rent are located in the Brickell Avenue area, which is defined by the Miami River to the north and the Rickenbacker Causeway to the south.

    Downtown Miami has the next highest number of available rentals with 26 percent of the inventory. This area is define from the Miami River north to the MacArthur Causeway.

    The remaining 21 percent of the units for rent are located in the Biscayne Boulevard Corridor, which is located between the MacArthur Causeway north to the Julia Tuttle Causeway.

    Rents today in Greater Downtown Miami range from $975 per month for a 758-square-foot unit in a 34-year-old building in the Biscayne Boulevard corridor to $15,000 per month for a 4,000-square-foot condo in a waterfront trophy building on Brickell Avenue.

    The median asking rental price is $2,090 for a two-bedroom unit with 1,141 square feet in a new condominium that opened in 2008. This works out to $1.83 per square foot per month.

    About 78 percent, or 621 units, of the total condos available for rent in Greater Downtown Miami are priced between $1,000 and $2,500, according to the report. Here is a rounded breakdown:

    - 2 units (0.3 percent) are priced at $975 and $995;
    - 98 units (12.4 percent) priced at $1,000 to $1,499;
    - 254 units (32.1 percent) priced at $1,500 to $1,999;
    - 215 units (27.2 percent) priced at $2,000 and $2,499;
    - 123 units (15.5 percent) priced at $2,500 to $2,999;
    - 32 units (4 percent) priced at $3,000 to $3,999;
    - 22 units (2.8 percent) priced at $4,000 to $4,999;
    - 22 units (2.8 percent) priced at $5,000 to $5,999
    - 17 units (2.1 percent) priced at $6,000 to $9,999;
    - and 6 units (0.8 percent) priced at $10,000 to $15,000.

    The units available for rent break down this way: 28 units, or 3.5 percent, are studios; 291 units, or 36.8 percent, have one bedroom; 399 units, or 50.4 percent, have two-bedrooms; 63 units, or 8 percent, have three bedrooms; four units, or 0.5 percent, have four bedrooms; and 2 units, or 0.3 percent, have five bedrooms.

    The median price for a studio is $1,400 per month for a 485 square foot unit in a brand new condominium project in Downtown Miami on Biscayne Boulevard. This works out to $2.89 per square foot.

    For a one-bedroom, the median price is $1,620 for a 750-square-foot unit in a new tower on the Miami River. This works out to $2.16 per square foot.

    The median price for a two-bedroom unit is $2,300 per month for a 1,222-square-foot condo in a new building fronting the bay in the Biscayne Boulevard Corridor. This works out to $1.88 per square foot.

    For a three-bedroom, the median price is $3,190 for a 1,650-square-foot unit on a waterfront building on Brickell Key. This price works out to $1.93 per square foot.

    The median price for a four-bedroom unit is $8,500 for 3,415 square feet in a bayfront building in the Brickell Avenue area. This monthly rental price works out to $2.49 per square foot.

    The two five-bedroom condos current available for rent have asking prices of $7,200 and $14,000 per month.

    Bulk Buyers Purchases 120 Downtown Miami Condos

    A $1 billion U.S. opportunity fund paid an average of $252,500 per unit for the last 120 units in the newly completed 54-story 50 Biscayne condominium tower in downtown Miami, netting the seller $18 million. To read the entire story, please visit our blog CondoDump.com.

    Florida Bank Shut As Regulators Continue Offensive

    As Florida’s real estate market continues to plummet, banking regulators stayed on their offensive to clean up the industry by taking the extreme step of seizing a Florida-based institution on Aug. 1. To read the entire story, please visit our blog CondoDump.com.

    Condo Vultures® Deep Discounts of the Week: Bank Owned Properties

    Here is a list of some of the biggest discounts in the Vultures Database™ on bank-owned condo units in Miami-Dade, Broward, and Palm Beach counties:

    Miami-Dade County:

    Aventura: There is a one-bedroom, bank-owned condo in Aveturna offered at $112 per square foot.
    Bay Harbor Islands: There is a two-bedroom, bank-owned condo in Bay Harbor Islands offered at $180 per square foot.
    Coconut Grove: There is a four-bedroom, bank-owned house in Coconut Grove offered at $174 per square foot.
    Coral Gables: There is a two-bedroom, bank-owned condo in Coral Gables offered at $220 per square foot.
    North Bay Village: There is a two-bedroom, bank-owned condo in a waterfront building in North Bay Village offered at $157 per square foot.
    Miami Shores: There is a three-bedroom, bank-owned house in Miami Shores offered at $149 per square foot.
    Miami: There is a one-bedroom, bank-owned condo in a new building in Miami’s Biscayne Boulevard Corridor offered at $186 per square foot.
    Miami Beach: There is a two-bedroom, bank-owned condo in a waterfront building in Miami Beach offered at $151 per square foot.
    South Miami: There is a four-bedroom, bank-owned house in South Miami offered at $136 per square foot.
    Sunny Isles Beach: There is a two-bedroom, bank-owned condo in Sunny Isles Beach offered at $119 per square foot.

    Broward County:
    Fort Lauderdale: There is a two-bedroom, bank-owned condo in an oceanfront building in Fort Lauderdale offered at $271 per square foot.
    Dania Beach: There is a three-bedroom, bank-owned house in Dania Beach offered at $86 per square foot.
    Hallandale Beach: There is a two-bedroom, bank-owned condo in a building on the Intracoastal Waterway in Hallandale Beach offered at $117 per square foot.
    Hollywood Beach: There is a two-bedroom, bank-owned condo in an oceanfront building in Hollywood Beach offered at $133 per square foot.

    Palm Beach County:
    Boca Raton: There is a two-bedroom, bank-owned condo in Boca Raton offered at $66 per square foot.
    Boynton Beach: There is a three-bedroom, bank-owned house in Boynton Beach offered at $100 per square foot.
    Delray Beach: There is a two-bedroom, bank-owned condo in Delray Beach offered at $61 per square foot.
    West Palm Beach: There is a two-bedroom, bank-owned condo in West Palm Beach offered at $97 per square foot.

    To get more information on these properties, please don’t hesitate to contact Condo Vultures® Realty LLC at 305-865-5629 or by email at inquiry@condovultures.com

  56. Hugo,
    I have been saying the same much before Peter. I really wish that someone addressed the issue as to where all these new renters are coming from. SOBE? Kendall? Doral? North Miami? or out of Miami?

  57. AJ,

    Did you notice that I made the adjustment on my Condo Rankings page for Blue Condominium? My developer just needs to move it to #3. Your 1800 Club is now #2 in the Arts District.

  58. “This year 1,102 condo units have been leased in the Greater Downtown Miami area,”

    What would the number have been 2 years ago? How much of an absolute difference ae we talking here? like 300 units or 700 units? With the drop in the dollar, I would imagine some foreigners are renting on almost a whim.

    You get depressed absolute pricing due to subprime and a 40% reduction due to currency, a lease might almost be a trivial purchase for a foreigner that has a remote interest in Miami.

    I’m not sure if thsi is a cultural thing, but on a few occassions, I’ve seen predominantly French people rent out a place and then there would be a revolving parade of different French inhabitants throughout the year.

  59. That bulk buy of 120 units for an average of 250K per unit at 50 Biscayne is interesting. Those units will easily under sell and under rent the existing owners. The average of units for sale on MLS is more like $550K, or should I say was $550K?

    I’d expect current sellers to be more motivated to sell quick before those 120 units are added to MLS or 120 additional units are rented out.

  60. perez,

    I doubt that they’ll dump all 120 on the market at once. I also don’t think that we’ll see them on the MLS. They’ll likely have Related Cervera lease them. From what I’ve read, it looks like the fund wants to lease them until the market recovers so I don’t think we’ll see these appear on the market for sale anytime soon.

  61. Thanks Hugo,

    My impression is that this report paints an exaggeratedly positive picture of the rental market. Notice that the rents mentioned are median figures, not averages (mean). This makes a significant difference in a volatile RE market where the wide distribution of rents listed on the mls may vary tremendously (read: in some cases – reality not yet setting in). At the article’s projected 1.25 per sf we will have every college coed at UM looking forward to partying it up in the common areas – which is great! Regardless, thanks again for the info.

  62. JL,

    I did a search in the MLS about units that have rented in the following zip codes: 33129, 33130, 33131, 33132, 33137. This represents Brickell, Brickell Key, Downtown Miami, Park West and the Arts District.

    I discovered that 3,192 units have rented from 8/7/2007 – 8/6/2008.

    2,007 units rented 12 months earlier, from 8/7/2006 – 8/6/2007.

    1,454 units rented 12 months before that, from 8/7/2005 – 8/6/2006.

    I’ve experienced that most of the renters are coming from Miami Beach, Kendall and from out-of-state. Most of the out-of-state people are relocating here for work. The Miami Beach people tell me that they love living in Miami Beach but being able to afford a 2 bedroom in a brand new building in Miami rather than a 1 bedroom in an older building in Miami Beach is just too tempting to pass up. The people from Kendall have mentioned that increased gas prices have prompted their decision to relocate closer to work.

  63. Thanks Lucas,

    This market really does have a lot of ingredients sloshing around in it.

    You have fraud and overbuilding tempered with greatly increased buying power from overseas and now you also have the gas consideration most likely affecting the lower to lower-mid end.

    Here’s another thought, anybody else think SOBe is progressively losing it’s allure. I don’t know anybody that thinks it’s getting cooler… maybe that’s another factor. Peope are more willing now to look for another scene.

  64. Can someone tell me how Condo Vultures was able to derive all this data from a supposed “shadow market”? How are they able to account for all the private listings? If this is just based off the MLS, I bet its highly inaccurate and is under-representative of the rental market as a whole.

  65. JL,

    Icon opening in September sounds highly unlikely to me. I called the sales center about a month ago and they told me that the first tower would begin closings around November-December and that the other two tower would begin towards the beginning of 2009.

  66. lucas,

    the Aqua unit was the 4 bd/4bth w/o a balcony. i don’t recall the unit number. as you said, it’s gone somehow (off your deals page). this was the unit i wanted to see … not sure what happened.

  67. Attention Doubters re the strength of the Miami downtown and Performing Arts Center areas:

    Take a slow drive across the venetian causeway about 9 pm and you will likely be as AMAZED as I was 2 nights ago when I guess -only a guess from moving car-I saw lights on in 30-40%+ of the marina blue, biscayne 900, 10 museum park 1800 club, and quantum south tower buildings-
    Opera Tower looked quiet..

    And since some of the owner/renters were probably out and about at that time suspect you could add a few % points to the above get a more accurate % occupancy factor..

    The Grand condo at 1717 no bayshore dr with 800 units has only app 80 in MLS and had a lower % of units lighted up than the new buildings-

  68. Who is going to buy any of theses condos with 20% down. Who is going to lend without it? It’s a game FHA, FNMA, FRHLMC are all going though the motions in a desperate attempt to blunt the free fall that should have all ready been here but is coming. I wish it wasn’t. All this news is national and we are in a three way tie for the worst situation in the world. There is no logical hope for price stability in South Florida for years to come. Anyone thinking otherwise is (pardon me) a dreamer or an utter fool.

  69. george, most people would say developers are playing a childish game with the lights. In the newer buildings (Marina Blue/900), there’s no way they are remotely close to 40% occupancy since you need to put in flooring etc. before moving in for real.

    In fact, I can’t recall seeing any condo that was 30% lit up on any night.

  70. I do not know how accurate all these figures are but I rented my 1bd loft in Quantum in a matter of several days. I speak from experience. Also returning back to the recovery of 25% of deposit if you do not want to close. Also I am speaking from my own experience I got it without any problem and I dealt with 2 different developers. Time frame was different for each one of them but it happened without hiring an attorney.
    May be some developers do not do that but from my experience it worked alright. I cannot release more detail due to the confidentiality agreements but this is what happened to me.

  71. Lucas,
    Thanks for the correction! Now I can hold my peace and sleep better at night!

    You also said, people are moving from Kendall and other out lying areas to these shiny new buildings. I wonder what is the situation for those home owners in those areas bleeding renters to the Greater Downtown area.

  72. JL,
    You said,
    “Here’s another thought, anybody else think SOBe is progressively losing it’s allure. I don’t know anybody that thinks it’s getting cooler… maybe that’s another factor. Peope are more willing now to look for another scene.”

    I have a condo in both SOBE and Greater Downtown area. So I guess I can make an impartial assessment. From what I observe, SOBE is losing its allure and chicness to downtown. SOBE is becoming more and more for tourists only and the locals, especially the sophisticated and discerning ones are gravitating to clubs, restaurants and art scene in the greater downtown area. The only time they go to SOBE is when they want to go to the beach.

    I would not be surprised if soon, Miamians would actually snigger if a suggestion is made to go to SOBE for an evening out.

    Even as we speak, SOBE locals in increasing numbers are actually driving to downtown for many events, and nightclubs. They would not be caught dead in a Ocean Drive restaurant. Lincoln Road may soon suffer the same fate. SOFI restaurants are a hold out though.

    Eventhough SOBE may lose its charm with the local sophisticated populace, it will still be popular with the tourists and gays for a long time to come. That itself will keep it going strong.

    If you want to see what is going on with the Downtown revolution, check the sites such as http://www.miamiurbanlife.com
    you will be surprised to see the action that is going on. It is as if SOBE doesn’t even exist for the social networkers of this site.

  73. AJ,

    When I was in architecture school at U.M. in the early 90′s I remember one of my professors saying Kendall was eventually going to be the slums if Miami’s downtown ever went through an urban renewal…maybe he was prophetic and that’s where it’s headed????

    And yes, Bayview Shops sounds like a good solution for Sprawlmart- sorry for the delayed response!

  74. no way will icon brickell open in september. exterior painting isn’t complete and there are still exterior red construction elevators running up and down the sides of the towers. year-end at the earliest, I’d say.

    oh, and don’t count the lights on at night for anything. drive by at 5:30am and see how many of the same lights will still be on.

  75. lara said: “May be some developers do not do that but from my experience it worked alright. I cannot release more detail due to the CONFIDENTIALITY AGREEMENTS but this is what happened to me.”

    Baby gurl, let me ask you a question:

    If a developer was simply honoring the contract in a timely manner, essentially permitting you to CAP YOUR LOSS at 75%, why do you need a “CONFIDENTIALITY AGREEMENT”?

    You would think that the developer would love to have you telling everybody you could find what a “good guy” he is for his magnanimity.

    Think about that and realize you are 1-in-500. Your “geography” come into play? What about the deposits from the housewife in Islip or the guy in Caracas?

    This is HILARIOUS!

  76. Un Related,

    MAy be if you do not ask for it you are not going to get it but if you e-mail to them requesting a refund (if it is stated in the contract) you’ll get it.
    Also I know my friends went away from their purchase in 50 Biscane. It was a very large and expensive apartment. They did not even requested a refund. 2 months later after they refused to close they got their letter in re to default, signed it and 2 weeks later they got their check back.

  77. lara
    considering that un-related does seem to be shy about expressing his opinona…i’m absolutely, 100% positive that he did what you suggested and the developer still didn’t give him his deposit.

    an aside…i was in 500, avenue and wind yesterday, checking out some places with a friend. we probably looked at 20 units altogether. granted, i am one of the cynics who posts on this board with respect to the current ills of the RE market…but really, after looking at units in both of these buildings, i am completely dumbfounded why anyone would buy there at today’s, or for that matter, tomorrow’s prices. do any of you realize just how much inventory is coming online? if people do close, how long will they hold? i’m telling you folks, it will take a decade for the brickell/biscayne corridor to work itself out.

  78. jcrimes said: “considering that un-related does seem to be shy about expressing his opinons…”

    Neither do you and GOOD FOR US! I don’t normally “blog” but this one has, at times, startled me.

    I met “plungers” who have “3 units at X” and “4 units at Y” and so on and so on…. These aren’t Russian cleaning ladies who bought 6 units at 50 Biscayne and Harbour House; these are high-profile business people. I don’t feel so bad now and no, it is not a case of “misery loves company”!

    I have nothing personally against the biggest “bad boy” of condo developers and hope they survive this mess intact.

    lara, I don’t need lawyers for the 25%; I know that. Some of this litigation is probably over-reaching but some of it is justified. I was chiding la la over the necessity of a Confidentiality Agreement for a VOLUNTARY partial deposit return. I had to sign one but is was for a pre-litigation “matter” that grossed almost all of my depositS a year before completion. I know it’s an “apples to watermelons” comparison so, to me, her comments were silly.

  79. lara

    can we ask what you rented your loft at Quantum per sf? I have a friend who needed a place for 2 months and rented a 1BR fully furnished (and nice) for $1,400. Again, short term and fully furnished!

    I also have several friends who have rented units in the brickell area and downtown (one miami) and they are not paying anywhere close to $1.85psf! More like $1.50 psf!

  80. I wonder how long the rental prices on the beach will remain so high; I’m getting $2.16 psf for a studio on West Ave with water views.

    People can talk up downtown MIA all day long but it’s only so they aren’t reminded of how much worse it is than being on the beach, where excellent restaurants/nightlife/people are the rule, not the exception.

  81. Hi Hugo,

    My unit was rented for $1,300 long term not furnished. It is sowhere around $1.85/sq.ft. Do not forget that it is a loft with 16ft ceiling. For those people who value lofts it is a big plus.

    To Un Related: I am not against litigation at all. If you feel that your request will go beyond 25% of deposit by all means go ahead. I meant that people who want to return just 25% of their deposits it is not necessary to litigate in many case and I just based it on my experience.

    Yes, I am a Russian speaking Jewish Lady but would be fired from any cleaning job due to the lack of skills literally and metaphorically.

  82. Lara said: “Yes, I am a Russian speaking Jewish Lady but would be fired from any cleaning job due to the lack of skills literally and metaphorically.”

    Don’t get me wrong. There was a suit filed against Related last year by a NY resident who was “a Russian cleaning lady”. They had sold her, if me memory serves me right, either 4 or 6 condos at 50 Biscayne and Harbour House.

    I certainly didn’t mean to imply anything about you or anybody else….

  83. Hi Hugo,

    I’m looking into renting a place in Brickell or Downtown. Where did your friend find the places that were $1.5/sq ft? Thanks.

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  85. Unrelated,

    You have me confused with Lara. I don’t comment on preconstruction deposits and whether to sue or not. I read all your all posts with interests, but I do not own nor do I plan to own preconstruction in Miami.

    I bought in a good old building with special assessments and large square footage, yep that’s me. I usually limit my comments to architecture and urban planning issues only.

  86. JCrimes,

    It is not for me to judge. Let others do it. You certainly have some since you are working with big or small developers.

  87. Hi Lucas:

    I am the listing agent for the unit listed at $159k that you mentioned at the begining of this blog.
    I ran into all those low sales when I was trying to arrive at a listing price for the unit. I believe they were all Quit Claim deeds like someone mentioned before and not at arm’s length transactions. In my experience what I have also seen happen is, people could not qualify for the purchase and they bought with “borrowed” credit and after a few months they just recorded a quit claim deed to put the property under their names. Of course the original buyer is still responsible for the mortage loan to the lender. In any case those price are not representative of True Market Values, things are bad, but they are not THAT BAD, at least not yet in my opinion.

    The situation for The Vue and The Club does look scary. Those 2 really have a lot of REO activity. I have a unit listed at the Vue and the values keep declining fast. I had told the seller about a month ago that if they didn’t lower the price fast they would have to sale for about $90k and guess what? That’s close to the kind of offers they are getting now.
    By the way, thanks for showing!

  88. “after a few months they just recorded a quit claim deed to put the property under their names. Of course the original buyer is still responsible for the mortage loan to the lender. ”

    OK, so how exactly does this work?

    The original mortgage holder still owes the lender so what exactly does “selling” the unit to a third party with a “Quit Claim Deed” accomplish? It seems the bank can still reposess the property.

  89. Some decide to QC the property in order to avoid creditors, judgments or other liabilities that could result in a loss of the property. But the original owner (who gave the mortgage + signed the note) will still be liable on the loan, even if they no longer have title to the property.

  90. Very well explained Drew, Thanks.

    In addition there are many different reasons for a Quit Claim Deed. I have seen cases where people are so desperate cause they can’t make the payments that they give the property away through a QC to someone who “promises” to keep payments current. Usually ends up in foreclosure anyways.

  91. Are quit claim deeds recognized so easily? I remember when one of my friends was challenged, saying it was done to defraud the creditors. He had to go to extraordinary lengths to prove otherwise.

  92. Candela,
    $2.16 per sf for a studio is not a surprise. Usually studio per sf is more than the 1 or 2 BR’s. In any case, If I am correct, you have a studio with a bayview in Mirador. Those units are always popular with short term renters and tourists, who pay more.

  93. The QC is publicly recorded so it is hard to see it is defrauding anyone. The seller is not representing that he owns clear title, he is just conveying whatever interest he has. It won’t avoid a foreclosure, but it seems it would be helpful, maybe, in avoiding other judgment creditors who obtained a judgment after the “sale” as the judgment wouldn’t be a lien on the property. I guess that is where the argument would be made that it was a fraudulent transfer, esp. if “buyer” conspired to avoid upcoming judgment. Anyone have any thoughts on this?

    Could someone comment on land trusts? I’ve heard of homeowners conveying their property/homestead into a land trust. Is this done to avoid foreclosure/judgments. Pros/cons?

  94. Land trusts are usually used for privacy (your name will never be associated with the property in the public record). It’s difficult to find sales information, etc. It does not shield the property from being foreclosed upon, as the property (res) is what secures the mortgage note. It’s alos useful to avoid liability issues associated with landlordship — Carlton Sheets made this popular for small investors with multiple rental properties. It CAN however be a useful tool to obfuscate ownership during foreclosure actions– which in this day, essentially bogs down the foreclosure coggery. Practically speaking, if I am faced with foreclosure, I can likely rely on the land trust as well as the length of time it takes to foreclose due to backlog to live mortgage-free for a good long while (maybe 6-8 months or so). Throw in a motion to the court to have the mortgagor produce the actual promissory note and I just bought another 4-6 months. Meanwhile, I live mortgage-free (primary residence), or maybe scam some month-to-month tenants.

    Re: quit claim deeds. They are not required to be recorded (no instrument is), but recording helps out with protection from a subsequent purchaser who may attempt to wrest title. QC’s are pretty much only used with close relatives, because they are mostly worthless in arm’s length transactions. No one with half a brain would pay ANYTHING for a quitclaim deed — even on a speculative basis. Any sales record reflecting it should be viewed with suspicion.

    This is all my opinion and not legal advice.

  95. Hi, been following this site for a couple of days. I live in Europe and was recently in Miami on holidays. Got to thinking a second home could be an idea. I like the Bal Harbour area. I went to see One Bal Harbour and harbour House by pure chance as wife was in the mall.
    OBH is quite impressive but per sq ft maintenance seemed quite expensive. Harbour House looked quite nice to me. 5 minutes of research and it stands out that there are a million units for sale at Harbour House plus in this blog there are so many negative comments with regards to its quality and the developer coming across as a shady company/person.
    What’s the true story there, anyone aware of any gossips, is the building doomed? The scary part is so many empty units, who would pay the HOA fees? I was told the developer has to cover the cost for empty units until about 70% are sold, at which point the developer’s not responsible anymore. So the risk here seems to be that the HOA will just blow up and the building would decay fast. Is that a near-certainty now? Any idea what a fair price sq ft would be?
    My primary motivation is not to invest, dont really expect a big return, plus i’d pay cash. I just want to avoid losing it all if the building is about to collapse financially speaking (and why not, structurally speaking too). Any comments would be welcome.

  96. leaner,

    you do the price to rent ratio. Check what the units are renting for. Get the taxes for the address at this site: http://www.miamidade.gov/proptax/

    Then you plug your taxes, HOA, unit maintence costs into they NYT RENT vs OWN calculator here :

    http://tinyurl.com/5g4h9j

    Since you are using all cash, you need to estimate your typical returns on where your money is now (Stock market, CDs, bonds, etc). My feelings are the unit will be overpriced. In that case it is cheaper to rent the unit while the price drops. And drop it will….

  97. I would add: until it is cheaper to own, you can expect the HOA to further deteriorate, special assessments, foreclosures, etc. Also, I think rents are going to drop precipitously, so you should factor that into your analysis. And also the Alt A(option ARM, LIAR Loans, NINJA Loans) implosion is just beginning, so expect further price declines.

  98. la la
    you suck!

    harbour house is really nice. but considering the amount of inventory, i don’t see the need to rush in and buy today.

  99. Heard OBH monthly maintence is going to shoot way up towards the moon, probably will effect values there……….. What are Harbour House monthly’s at?

  100. The prob with those so called “rent to own” programs is that it’s a scam.

    You rent at a semi decent price but when hey say they’ll apply all of the years rent towards the purchase prce they want to sell you the condo at a still over-inflated price. I noticed thsi in many projects especially Related’s where I had inquired about it.

    So in all respect it’s a marketing gimmick to make you feel good about renting or get you hooked on the developers inventory vs the desperate owners so you pay maybee $100 – $200 more in rent but in reality you are only goign to be disapointed cause at the end of the year the sales price is still ridicoulous.

  101. Harbour House’s maint. fees are currently $ 0.6/sq ft or so i was told.
    With many units still empty, again i’m no expert, but i think the developer picks up the tab on the empty units until a certain point, say, 70% of occupancy… once that threshold is reached, the developer’s off the hook and the HOA is in control.
    This sounded a bit strange to me because, if true, here’s a scenario: with 70% minus one units sold, the total income raised in fees to cover expenses is shared by all units (70% minus one by owners and 30% plus one by Related). Then one additional unit is sold, Related steps out, the expenses which are the same now have to be covered by the 70% of the units that were sold, which would, if this is correct, mean that for the owners the tab goes up by almost 50% each the minute that last unit to reach the minimum level is sold.
    Given how hot the market had been for so many years, this might be a problem that normally wouldn’t happen, so i wonder if anyone has been through this or knows how it goes.
    What really happens to a condo when say 70% of units are sold? Does the developer who still legally own the other 30% has to pay its share or the 70% sold to outsiders have to cover the full costs?
    In other words, given so much inventory for sale at that building, what are the real risks of this becoming a major problem? HOA has precedence over other liens/mortgages?

  102. Sorry to go off topic, but did anyone notice the precipitous fall of the Euro overnight?

    “We are now seeing a lot more negative surprises coming out of Europe than from the U.S., more so than any time during this credit shock,” said Jim McCormick, head of currency strategy at Lehman Brothers Holdings Inc. in London. “At the same time, you’ve got some pretty strong capital inflows to the U.S. We kind of have the perfect circle of fundamentals bumping into strong technicals.”

    Source: http://globaleconomicanalysis.blogspot.com/

    This might be the time to change any euros back into dollars guys… BTW, this is not good news for local real estate as everything just got a little more expensive for foreign European buyers.

  103. JL opined “I knew a ton of people that purchased 500K+ condos over the past 5 years in Miami, and honestly, maybe 10% at most had 100K+ in cash laying around that they could have used as a 20% deposit if the banks required it (which they didn’t)”

    the spirit is fine even though content a bit awry. As 30000+ new units come into the market in next few months, a 5 yr inventory , and sofla unemplyment rising to ~8% and by mid 2009 we have a situation where demand will simply dry up. That 20% would be significantly smaller than 100k.
    In 80s specufestors as well asinine banks wept,begged for mercy from prospective buyers and almost gave ‘em away. That price/sq ft that realtors often squeal about, and those potential construction costs that Pimps- -in- the-Game often take some solace in would have no bearing on the end game.
    This summar sofla was spared the hot iron of credit debacle due to currency arbitrage currently enjoyed by some foreign countries. But as UK/spain/italy/ Eurozone/japan debacle gathers full steam it takes away that morsel of pity handed to sofla for the last few yrs.
    Not to be left alone, the sprightly kiddish BRIC economies will fall over sooner than you think.

    Folks, deleveraging takes much much longer than those miami latinas stripping ‘em all off.

  104. Just moved here from Princeton, New Jersey. My wife and I think this is the most overpriced place. My car insurance on a my 350E Mercedes was 650 dollars a year. Here the quote was $1,880 for the same coverage and limits. My daughter is 5 and she is going to a private school in coconut grove. We are paying $22,000 a year for a school that is not as a good as the schools in Princeton, NJ which are free.
    We had a gorgeous home I sold for $1,500,000, custom home on a large 1 acre lot. House was high end with Wolf appliances, subzero, pool, 5,000 feet. We were in the prestigous neighborhood of ettyl farms and could walk to Princeton downtown and the university. There is zero crime in Princeton and no such thing as gated communities. They don’t need to be marketed there, because there is no crime. We have mansions for 3 and 4, 000,000 million dollars owned by Wall Street executives, and though the house may be gated, the neighborhood is not needed to be.
    The average per capita is $89,000 with many high paid professional jobs, and higher educated work force, many with masters and phd’s.
    Miami needs to wake up, the overpriced quality of life here sucks to the max. Take me home to Princeton. Moving here was the biggest mistake of my life.

  105. Take me Home, just out of curiosity why did you relocate here?The only reason for most of us northeners is the weather. Since I moved here 8 years ago everything has gone up dramatically. I saw the handwriting on the wall and sold my condo 1 and 1/2 years ago. I rent now. Renting down here certainly takes the sting out of ownwership. I would go back to princeton if it wasn’t for the cold weather. Miami will never change. It will only get more expensive.

  106. Take Me Home said: “The average per capita is $89,000 with many high paid professional jobs, and higher educated work force, many with masters and phd’s.”

    Therein lies the reason why the situation here will become more pronounced in the future.

    I personally would not live anywhere in the Northeast but I am not a native Floridian. I’m from L.A. and if I get sick of Miami, I could return although that is not a consideration at this point.

  107. “Miami will never change. It will only get more expensive.”

    Take me home:

    What was wrong with Jacksonville? Great weather – I lived there for three years and it seemed like a great place to raise children. It was a little country – being so close to Georgia, but I’d take polite country over the predominant rudeness here.

    Miami??? It’s my hometown, I grew up here. I’m single and love this town for obvious reasons but I’ve always been sadly aware that this place has the highest per capita concentration of knuckle dragging neanderthals with means. Present company (cultured and intelligent contributors to this blog) excluded, of course.

    We have great weather, mangoes are awesome, and the keys are a nearby respite – but we are the epitome of baseless pretense and unfounded attitude.

    Anyway, welcome to miami and best of luck acclimating.

  108. Take me Home,

    Car insurance is so high because we have the worst drivers in America. We also kill the most pedestrians in the country. # 1 for road rage too!

    And I remember hearing some ridiculous statistic some years back about what percentage of drivers are armed and uninsured. Don’t engage in road rage.

    My mantra when driving is, “I can’t control what others do to me, I can only control how I react to them.”

    The reality is that 90% of the people drive fine, it’s the 10% colassal assholes that make driving here so unpleasant.

    I have to include this cause it cracks me up! I know it’s an oldie, but it’s a goody.

    Basic Rules for Driving in Miami

    1. Turn signals will give away your next move. A real Miami driver never uses them.

    2. Under no circumstance should you leave a safe distance between you and the car in front of you, or the space will be filled in by somebody else, putting you in an even more dangerous situation.

    3. The faster you drive through a red light, the smaller the chance you have of getting hit.

    4. Never, ever come to a complete stop at a stop sign. No one expects it and it will result in you being rear-ended.

    5. Never get in the way of an older car that needs extensive bodywork. Miami is in a no-fault insurance state and the other guy doesn’t have anything to lose.

    6. Braking is to be done as hard and late as possible to ensure that your ABS kicks in, giving a nice, relaxing foot massage as the brake pedal pulsates. For those of you without ABS, it’s a chance to stretch your legs.

    7. Never pass on the left when you can pass on the right. It’s a good way to scare people entering the highway.

    8. Speed limits are arbitrary figures, given only as a suggestion and are apparently not enforceable in Miami during rush hour.

    9. Just because you’re in the left lane and have no room to speed up or move over doesn’t mean that a Miami driver flashing his high beams behind you doesn’t think he can go faster in your spot.

    10. Always slow down and rubberneck when you see an accident or even someone changing a tire.

    11. Learn to swerve abruptly. Miami is the home of the high-speed slalom driving thanks to the State Highway Department, which puts potholes in key locations to test drivers’ reflexes and keep them on their toes.

    12. It is traditional in Miami to honk your horn at cars that don’t move the instant the light turns green.

    13. Remember that the goal of every Miami driver is to get there first by whatever means necessary.

    14. In the Miami area, ‘flipping someone the bird’ is considered a polite New York salute. This gesture should always be returned

  109. La La,
    Can’t agree more. I have seen the most putrid drivers in Miami. Most guys driving the high end sports cars in Miami are big cnuts.

    Take me home,
    That is the price to pay for an entry to paradise.

    shwin,
    Howz your housing search going? You said in “Business Review” that your budget is $2200 for a 2 BR for a Oct 1st move in. Ever considered the 1800? That would be ideal for anyone working in Jackson Memorial.

  110. La La: LOL. I like #6 the most. I drive fast and am always watching my rear view mirror when stopped at traffic lights. I have almost been rear ended a few times by cars with “worn out” brakes where they need more than the normal braking distrance to stop. Also, when it rains, watch out for drivers with bald tires.

    I have gotten so used to Miami driving that I am unfit to drive in Milwaukee (where my brother lives). In Milwaukee everyone is very polite and people give you right of way. I feel like a bull in a china shop when i drive in Milwaukee. lol

  111. re #134-
    have you ever driven in portland oregon?
    drivers keep a safe distance, no one runs the red light or plays bumper cars-

    it is a different world out there

  112. Take me home,

    You cannot compare Princeton to Miami. 2 completely different cultures, lifestyles, attitudes, mentality. Princeton is a very well established elitist (to a certain degree) town fully influenced by the presence of one of the best universities in the country where the best professors and greatest minds of our time lived.

    Miami is a southern, port city (one of the best in this counry and very unique) but a megapolis with all good and bad that that type of city can have. It is like comparing apples and oranges.

    Sorry that you made a wrong decision for yourself. It is a very individual choice.

  113. A bull in a China shop! That’s funny! I’m like that when I drive in Chicago’s suburbs now too, the City driving is quite like Miami with all the buses and taxi drivers-it’s every man for himself!…

    Not only that, I think people are “weird” when I’m there because they’re friendly. And I’m out of practice, what used to come naturally- politeness, thoughtfulness & friendliness requires conscious thought and effort now.

    But I kill everyone with kindness now just to try to be a positive influence in Miami with my “new and improved attitude” toward living in this…

    Yes, I heard in Oregon and Washington the pedestrians don’t jaywalk and no one commits traffic infringements…BORRRING!

  114. “But I kill everyone with kindness now just to try to be a positive influence in Miami with my “new and improved attitude” toward living in this…”

    Sorry, but your days are numbered… “When in Rome, do as the Romans do”

  115. Lara,
    Yes, it is a very individual choice. Works for some and fails for others. So many of my New York friends who have moved there (to Miami) came back cursing in 6 to 12 months, swearing never to step foot in that town ever again. For some Miami should always be a one week visit town. Some people start getting bored even after a mere 3 days. But for every one of those failed moves, there are many more happy endings.

    I tell my friends, do not move to Miami for frivolous reasons. You are going to hate it.

    These are the reasons and necessary conditions to move:
    1. You must have a job in Miami. Preferably a decent one and not one of those here today gone tomorrow service industry jobs paying low wages.
    2. It helps if you have a decent housing in a good location, either owned or rental. Roommate situation will suck unless your roommate is in a relationship with you.
    3. Car is a must and a place to park it is also paramount.
    4. You must love warm weather.
    5. You must not mind humid Summers.
    6. You love Florida because of the picture perfect settings of the most seaside towns.

    The wrong reasons to move to Miami:

    1. If you are a multi ethnic food lover, stay put in NYC. You will not like the options in Miami. (I can hear murmers, but Miami is not a food lovers paradise, no matter what anyone might say. Outrageouly priced silly lounge restaurants do not mean a thing.)

    2. Thinking Miami is cheaper to live. It is actually more expensive (depending on ones life style) to live in certain Miami than Manhattan.

    3. Looking to make friends in this town. SOBE along with LA takes the cake for fake and shallow people. It is all about them what you can do for them. If you do not have a great place to live, a fancy car and know people who are connected, very few people want to maintain any kind of “friendship” with you. Even those who maintain a farse facade of friendship do not reply to your e-mails ot texts, do not (almost never) answer phone calls, rarely reply back to messages etc only when they want something.

    4. Looking for a relationship in this town: This is the reason most people who ran away from Miami site as one of the major reasons for hating Miami. It looks like the expectations and need of the people are so great here, that everyone is looking for someone or something substantially much more than them. Read all the ills I described in the friendship column above and reapply them to relationships too.

    I tell my friends, do not go to Miami looking for love. You may never find it and you will end up blaming the city for it (sorry single guys and girls, some of you may not be the horror I described above but a great majority seem like aliens from another planet).
    On the contrary, if you are a decent looking guy or girl, you can have all the sex that you want in this town. Something to cheer about?

  116. AJ
    my god…your last post is the first time i’ve agreed with everything you said. i mean, everything. especially rule 4.

    for all y’all complaining about driving in miami, i don’t find it that much different that when i was growing up in chicago. cut down to its basics, there are only two rules of the road that need to be followed. one, don’t ever stop; if you screwed up, keep on going and just backtrack. two, use all lanes to move around those people that violate the first rule.

  117. relationships AJ. i’ve always been a firm believer that they’re are two types of people in this world. those that want to improve their lot through their own efforts and those that want to improve their lot through the efforts of others. down, here, even the so called keepers (i.e., good schools, good jobs, good families and attractive to boot) all seem to fall in the second camp.

  118. Take me home,
    Princeton is nearly idyllic when you compare it to almost anywhere in the world… . It is the hub of some of the greatest minds anywhere and truly progressive on all fronts… Doesn’t seem fair to compare just about any city to Princeton… apples and oranges…

    We all have reasons why we live here… some were born here and have made a life here… some grew up here… some are here on business… etc, but the reality is that we do choose to live here so lets make the best of it. Granted, we have HUGE problems, but that is exactly the reason that we must each become civically active and attempt to make OUR city a better place to live in… throwing in the towel will get us nowhere…
    AJ,
    So true…

    I don’t know about the friendship part as I do consider myself very fortunate in that realm, but relationships here are effervescent and ephemeral at best…

  119. AJ said:

    “3. Looking to make friends in this town. SOBE along with LA takes the cake for fake and shallow people. It is all about them what you can do for them. If you do not have a great place to live, a fancy car and know people who are connected, very few people want to maintain any kind of “friendship” with you. Even those who maintain a farse facade of friendship do not reply to your e-mails ot texts, do not (almost never) answer phone calls, rarely reply back to messages etc only when they want something.”

    This is a “Condo blog” and perhaps best left at that. But seeing that you waded into this, here goes:

    1. With respect to SOBE remember it is a “tourist trap”, albeit an expensive one. The attitudes of residents may be embedded in the fact that their livliehoods are dependent upon their patronizing an array of part-time “invaders” who relish in their ability to wave a wad of cheap dollars in their face demanding whatever it is they want at that moment. Then, a week or month later, “poof” they are gone…….replaced by a new wave.

    There is really no difference between SOBE and Las Vegas! Perhaps, just perhaps, after a workday of “kissing asses”, maybe people don’t have any “free” time to dish out. That said, SOBE is a small part of Miami.

    2. When it comes to the “establishment” in both Miami and L.A., your perception of “phonies” may not take into consideration some fundamental facts which, by the way, are NOT confined to those two cities.

    I won’t elaborate, as this is a “condo blog”, however, outside of New York, L.A. and Miami may be the two most “Balkanized” metro areas in the USA. Perhaps “birthright” outweighs “political corectness” in some quarters?

    The “real” definition of “phoney” (an unmitigated FRAUD) was telecast around the world with the Olympics on Friday night. NO national “songs” accompanied the respective teams’ introductions! Bagpipe music? That what was “potically correct”!

  120. Unrelated,
    Got burnt quite a few times in these fake lands. People have taken advantage of me with impunity. This kind of selfish attitude is not seen in say Houston or Seattle. You are right in observing the transient nature of most people in Miami. Also note the fact that LA and Miami is crawling with the most wannabes than any other city , read models, actors, singers etc. That also could be another reason. But I do agree that SOBE is just one part of Miami. Since I experienced downtown living, I have seen a marked difference between the attitudes of the two worlds. Seems to me that the mainland Miamians are a bit more sincere than those living on the sandbar (DLJ excepted). Even those who transplanted themselves from SOBE to downtown seem to have a change of heart and attitude for the better.
    I know it is a housing blog. But had to vent. After all a city is a city not because of brick and mortar but because of its people.

  121. Lucas,
    I attended the auction in Miami Beach a month ago, and saw a 1/1 condo, 700sf, on a high floor with bay and downtown view in Isola – Brickle Key auction for $170k. Do you think this is a good price for the unit? What is your opinion on this building in terms of price/sf, and the health of the condo association?

    Does anyone else have any opinion?

  122. Hello all… I have been reading this great blog for a few days now and first of all – I would like to thank the owner of this blog and the contributors for the valuable posts and information… I was wondering if I can get some guidance here… My wife and I are first time buyers; preapproved for 250k and are looking to buy a 2 bedroom in either Brickell or Downtown in a fairly new building. These areas were out of our price range but it seems like some buildings are becoming affordable!

    The prices of both “Club at Brickell and The Vue” are very attractive and we looked at a couple of listings on the blog which really caught our attention… Even a 3/2 at the Vue is $279K which seems way too low and there has to be catch!!! I have some of questions perhaps someone can guide us on what seems to be a very hard decision:

    1- Is it wise to buy at these buildings considering the high rate of foreclosures (will the bank have an issue there?)

    2- What are the chances that the association fees going up dramatically in order for the associations to make up for the deficit from unoccupied units. Let’s say we plan to live ther for at least 5 years…

    3-Why are these two buildings so cheap and keep going down – Solaris is just next door to the Club but is much more expensive and both are going to get their view blocked by the new development!

    4-If we are planning to live there for at least five years, is it a good investment to buy at either building?

    5-Last question, are property taxes paid on the sale price of the unit or the appraised value? I am assuming the sale value.

    Thanks in advance
    Hamada

  123. The Ace has been telling you for over a year that $125.00 per square foot is coming but even the smart money did not invision $9.00 per sqare foot.

    Keep yer powder dry lads $5.00 per square foot might only be around the corner.

    The Smart Money

  124. Pingback: How To Get Rental Income From My Property In Costa Rica By Creating My Own Blog « Wicked Blogging

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